Cash or VTSAX in Divorce

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
Jersey Freestyle
Posts: 2
Joined: Wed Jul 10, 2024 6:17 am

Cash or VTSAX in Divorce

Post by Jersey Freestyle »

In recent divorce, I was ordered to pay $25k and split joint Vanguard account equally ($100k, 100% VTSAX). Ex is amenable to accepting it all in cash. We were separated for 3 years prior to divorce, so I purposely didn't invest as much as I would have liked because I wasn't sure what was going to happen when divorce was final. Now that it is over, I have updated my IPS and can invest accordingly. It seems like a no-brainer, but before I pull the trigger, I wanted to see if there is anything I'm missing? Thank you for your responses!
terran
Posts: 3269
Joined: Sat Jan 10, 2015 9:50 pm

Re: Cash or VTSAX in Divorce

Post by terran »

Presuming the VTSAX is now worth more than when you bought it you'd be better off financially giving half the VTSAX and investing the cash since that will give you a higher cost basis and you won't have to pay taxes on the capital gains of the shares you give.
exodusNH
Posts: 10986
Joined: Wed Jan 06, 2021 7:21 pm

Re: Cash or VTSAX in Divorce

Post by exodusNH »

Jersey Freestyle wrote: Wed Jul 10, 2024 6:40 am In recent divorce, I was ordered to pay $25k and split joint Vanguard account equally ($100k, 100% VTSAX). Ex is amenable to accepting it all in cash. We were separated for 3 years prior to divorce, so I purposely didn't invest as much as I would have liked because I wasn't sure what was going to happen when divorce was final. Now that it is over, I have updated my IPS and can invest accordingly. It seems like a no-brainer, but before I pull the trigger, I wanted to see if there is anything I'm missing? Thank you for your responses!
Give her the stocks since she will have your basis and will need to pay taxes if she liquidates it.
Topic Author
Jersey Freestyle
Posts: 2
Joined: Wed Jul 10, 2024 6:17 am

Re: Cash or VTSAX in Divorce

Post by Jersey Freestyle »

Good points. Original thinking based on psychological/market timing fear. This makes sense. Even though I have no plans to sell, opportunity to increase my basis is better play. That's why I love this forum! Appreciate your responses!
Post Reply