Division of Investment Portfolios and Securities in Divorce

Many couples accumulate various types of investment holdings during the course of a marriage. If they subsequently decide to divorce, they often face challenges in determining how to divide those assets. Dividing investment portfolios and securities in divorce can be particularly complex, especially when holdings include stocks, bonds, mutual funds, ETFs, or retirement-linked brokerage accounts. If you are contemplating ending your marriage and have concerns about the division of investment portfolios and securities in divorce, it is in your best interest to consult an attorney as soon as possible. At McClure Law Group, our skilled Dallas divorce attorneys understand the legal and financial intricacies of investment division, and we are experienced in protecting our clients’ interests when dividing investment portfolios and securities in divorce. If you are facing the end of a marriage and your estate includes significant investment holdings, we can evaluate your circumstances and help you seek a just outcome.

Texas law distinguishes between community and separate property, and that distinction is essential when dividing investment portfolios and securities in divorce. Generally, community property includes all assets acquired during the marriage, even if titled in only one spouse’s name. Separate property refers to assets acquired prior to marriage. It also includes property received by one spouse as a gift or inheritance. With investment portfolios, this division can become complicated when accounts contain both separate and community funds or when separate investments generate income during the marriage. For example, if a spouse owned shares of stock prior to marriage but reinvested dividends or added marital funds to the account, tracing and dividing those mixed assets can become a highly technical endeavor.

In many cases, the court must determine the character of each investment account or security and distinguish which portion is subject to division. If this cannot be done through clear records, the presumption of community property may apply. Texas courts will typically rely on expert financial evidence to trace investment transactions and to apportion value between community and separate interests.

The Texas Family Code requires the court to make a division that is “just and right,” which applies to the division of investment portfolios and securities in divorce. This standard allows courts to consider many factors, including the size of each spouse’s separate estate, each party’s earning capacity, and the nature of the investments themselves. Unlike cash or tangible property, securities are subject to market fluctuation, and valuation must reflect their fair market value at a relevant date, often the date of trial or the date of division.

Not all investment assets are easily divisible. Some may have penalties or tax consequences if liquidated prematurely, such as mutual funds with early redemption fees or stocks that would trigger capital gains taxes upon sale. Others may be illiquid or subject to complex management structures. In some cases, courts may award an entire investment to one spouse while offsetting its value with other assets to the other spouse. Alternatively, courts may divide shares “in-kind” so that each spouse receives a proportional interest without immediate liquidation. Our attorneys ensure that such decisions are made with full knowledge of tax implications, transferability, and potential future growth or decline.

Dividing investment portfolios and securities in divorce is rarely straightforward, and careful analysis is needed to determine how to divide them fairly. If you are facing divorce and have questions about investment division, you should speak to a qualified attorney as soon as possible. The experienced Dallas divorce lawyers at McClure Law Group are adept at handling sophisticated property division matters, and if you hire us, we can help you protect your rights and financial future. Our primary office is in Dallas, and we are available by appointment at our Collin-County office in Plano. We regularly represent parties in divorce cases in Dallas, Garland, Fort Worth, McKinney, Richardson, Frisco, Irving, and Rockwall. We also represent people with family-law matters in cities in Dallas, Collin, Grayson, Tarrant, Rockwall, and Denton Counties. You can reach us by calling 214.692.8200 or through our online form to schedule a confidential consultation.