Divorce in a Volatile Market: What You Need to Know When Emotions and Investments Are Both in Flux

Divorce is stressful on its own — emotionally, logistically, and financially. But when you add in a volatile stock market, things can get even more complicated. Assets that were once considered stable might be fluctuating wildly in value. Retirement accounts, investment portfolios, and even stock options can become moving targets. If you’re going through a divorce during a time of economic instability, understanding how to handle these shifting numbers is essential to protecting your financial future.

In most divorces, marital assets are divided equitably (not necessarily 50/50) — and that includes investments. But in a volatile market, determining the true value of those assets becomes a challenge. A retirement account worth $500,000 last month might drop to $450,000 — or rise to $600,000 — by the time the divorce is finalized.

That fluctuation affects:

• The fairness of the asset division
• The viability of certain settlements (e.g., keeping the house in exchange for stocks)
• Long-term financial planning after the divorce

Here are the top 4 key considerations in a Chicago divorce during a volatile stock market:

1. Get Assets Properly Valued — and Time It Strategically

Work with your family law team and financial professionals to get a current valuation of investment accounts. Some couples agree on a valuation date (e.g., the day of filing or separation), while others use the date of settlement. In unstable markets, the timing can significantly affect what each party walks away with.

2. Don’t Assume Equal Means Fair

Splitting a stock portfolio 50/50 may not result in fair outcomes if one party gets high-risk growth stocks and the other gets conservative bonds. It’s not just about numbers — it’s about risk profile, liquidity, and future performance. An experienced financial advisor can help balance those factors to create a more equitable agreement.

3. Be Cautious With Emotional Decisions

In times of emotional and financial instability, it’s tempting to make reactive decisions — like selling everything, cashing out accounts, or agreeing to keep one asset over another to “just be done.” Slow down. Hasty decisions can lead to long-term regret, especially when markets recover and you’ve locked in losses.

4. Consider Tax Implications

Some assets may come with hidden costs. For example, tapping into retirement accounts early can trigger penalties and taxes. Similarly, capital gains on appreciated stock could be taxed differently depending on how assets are divided and sold. You’ll want a divorce settlement that takes these tax liabilities into account.

If you’re navigating divorce during a market downturn or period of economic uncertainty, it’s vital to work with a divorce attorney who understands financial complexity and can assist with retaining any necessary financial advisors or forensic accountants. These professionals can help with risk exposure, develop a realistic division strategy, protect long-term financial goals, and ensure you don’t walk away from the marriage with all the risk and none of the reward.

Divorcing in a volatile market might feel like trying to build a bridge while the ground shifts beneath you — but with the right strategy, it’s absolutely possible to come out of it financially secure and emotionally empowered. Reach out to Jennifer Ward of Ward Family Law for an initial consultation via email at jward@wardfamilylawchicago.com or 312-262-5972.