How are investment accounts distributed in a high-asset divorce?

As you enter the process of divorce, you likely have serious questions about what will happen to your assets, particularly if you possess a high-value estate. If you are the primary breadwinner, you may worry about New York’s fair and equitable policy for property division. You may feel that you worked harder for the assets and deserve more. If you are the secondary breadwinner or have stayed at home to care for children or other reasons, you may be worried about the fact that your lifestyle is about to change.


In a high-asset divorce, there are likely investments like stocks, bonds and possibly others to divide. This process is more complicated than, say, a bank account or even a house. Because of taxes, the amount to divide is not the same as the amount on your statement. Instead, the amount distributed is how much you have left after taxes.

Distribution options

One possible solution to the problem of distribution is to sell your jointly-held stocks and split the proceeds. Like any action you will take at this point, there are tax consequences.

Another solution is to split the jointly held stocks equitably, dividing the assets equally. The IRS will allow you to keep the original investment price—also called cost basis—and holding period as when the assets were jointly held. If your investment has appreciated, you will have to pay taxes on any gains. Should you choose to divide your assets, make sure that your cost basis is equal as well. A financial representative can help you determine if this is the case.

As with any property division, the judge will also consider certain factors when deciding what is equitable. These factors can include potential future earnings, your investment risk tolerance and your financial needs.

Divorce is about compromise. Remember that you are making a life change, and you will necessarily forfeit some income. However, if this is the best decision for your life, it will be worth it.