Stocks and premarital assets

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Stocks and premarital assets

Unread postby Lion1234 » Mon Jan 01, 2018 1:30 pm

Just wondering if anyone knows how stock spinoffs are treated in determining premarital assets.

Say I had some stock acquired before the marriage. Wife never took any part in managing portfolio, so I believe it's passive and considered premarital. This stock had a spinoff AFTER the marriage resulting in additional holdings.

Zero information on the net about this. I did find where a stock that split in the similar situation, the new shares are considered premarital as well.

Checking with accountant about this.
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Re: Stocks and premarital assets

Unread postby astrolink » Mon Jan 01, 2018 4:03 pm

It depends on what state you are in. In some, the increase in value of the stocks is split. In others, it isn't. Have you seen an attorney?
“There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?”
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Re: Stocks and premarital assets

Unread postby Lion1234 » Mon Jan 01, 2018 5:57 pm

It would be either NY or NJ.

From extensive research I did, it seems if i bought stock before we married, and it was a passive investment (she never took part in managing it) with no co-mingling, the stock would be considered a premarital asset. I looked up relevant case law, and this would apply to stock splits as well.

Spinoffs are somewhat different. When a stock is spinoff, first stock decreases in value. Both combined are worth the same as pre-spinoff. If spinoff takes place after the marriage, I don't know what happens.

I am checking with an accountant and an attorney.
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Re: Stocks and premarital assets

Unread postby Lion1234 » Mon Jan 01, 2018 10:52 pm

well, several attorneys said that spinoff from a premarital asset (stock) is also treated as premarital. good news...

same applies to splits and dividends
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Re: Stocks and premarital assets

Unread postby LovingDadof2 » Tue Jan 02, 2018 10:49 am

Is the account in your name only? Has the account number stayed the same from pre-marriage until now? If so, then I can see those holdings being yours exclusively.

However, if the account was your initially but has been commingled (she's listed) then I highly doubt dividends are excluded from division. Dividends are earned over a set period of time of holding the stock. If that period of time is during the marriage, she's entitled to half (just like a homes appreciation) if she's listed as an account holder.
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Re: Stocks and premarital assets

Unread postby Lion1234 » Wed Jan 03, 2018 4:10 am

Account was in my name only. But it traveled from brokerage to brokerage so different account numbers.
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Re: Stocks and premarital assets

Unread postby LovingDadof2 » Wed Jan 03, 2018 7:46 am

Lion1234 wrote:Account was in my name only. But it traveled from brokerage to brokerage so different account numbers.
That may complicate things. Unless you have clean paperwork showing a complete, 100% transfer each time, she'll argue you opened the new brokerage while married and she's entitled to half. Better track down all that paperwork for a proper trail pronto!
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Re: Stocks and premarital assets

Unread postby MegaDad » Wed Jan 03, 2018 12:53 pm

The different brokerage firms your portfolio went to will maintain records of when your accounts were opened and closed, as well as any titling changes or maintenance done while in their possession (such as adding someone to the accounts). As long as you remember where your portfolio has been, you should be able to contact those firms and submit requests for your old annual statements (or quarterly if applicable)

When you moved your portfolio around, were they direct transfers or did you cash out and reinvest?
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Re: Stocks and premarital assets

Unread postby Lion1234 » Wed Jan 03, 2018 5:51 pm

Brokerages only keep 6-7 years of records so I can only rely on my paper ones. Some are out of business. But since they were all direct transfers, the one they are in now has the purchase dates.

Various financial companies i worked for required a single brokerage where you could keep stocks. The last comapny i worked for, I could only use Fidelity. There is no way around it.

I don't think it matters which brokerage the stuff was/is in, as long as it shows the purchase date. Plus I have quicken, which of course is BS since i can put anything into it.
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