Dividing Real Estate During a Divorce is Complicated
Everybody knows that a divorce can be a messy, involved process. One of the most complicated legal aspects of a divorce is dividing the real estate you and your partner own.
These properties include the family home, secondary or vacation homes, and other land either jointly or separately owned. The first step in properly dividing real estate is determining what type of property you’re splitting.
Having reliable attorneys help you through these difficult times is key to starting your life again after your divorce. If property division is going to be disputed, it is vital your have an attorney with experience in both divorce and real estate law.
Determining the Type of Property
In legal terms when going through a divorce, your property falls into one of two types. These types are known as marital property and separate property.
What is Marital Property?
If either you or your partner bought any property during your marriage, it is considered marital property. This includes real estate jointly-filed under both names and individually-filed under one name.
Yes, as long you purchased real estate during the span of your marriage, it is considered marital property.
How do we Separate Property During a Divorce?
Any type of property that was individually-owned by either party prior to the marriage is considered to be separate property. Real estate owned before marriage can remain separate property when dividing assets in a divorce.
However, this doesn’t always discredit the other party’s right to appreciation on a property still owned during the marriage.
In fact, if the property served as a home or provided income for both parties during the marriage, it could convert to marital property and be divided equitably during divorce.
Actually, the state you live in determines how your real estate is divided and re-distributed during a divorce.
Determining the Value & Equitability of Real Estate in a Divorce
Courts would consider any appreciation in a property’s value a joint-benefit if the spouse were involved in some way. Renting out the property as a means of additional income during the marriage also complicates the dividing of real estate.
The two main types of divorce real estate division laws are Equitable Distribution states and Community Property states.
Equitable Distribution States
The majority of states in America (40, to be exact) are considered Equitable Distribution states. This term means that, during the divorce process, any properties subject to marital distribution will divide and distribute equitably.
Equitably does not mean equally. The equitability of real estate is determined by several factors, including:
• The income and individual properties owned before/at the time of the marriage compared to after.
• The financial contributions of each party to the property in question.
• Whether or not the property is home to children of one or both of the parties.
• The overall health and age of each party and the custody rights of each parent (if children are involved).
• Loss of any inheritance, income, benefits, or other properties as a result of the marriage or the divorce.
• Any incurred debts during the marriage or as a result of the divorce.
Community Property State
In 10 U.S. States, almost everything acquired during the marriage is subject to 50/50 ownership. Everything from real estate, to income, to assets, to debt gets distributed to each party at precisely 50%.
One of the few exceptions to this division process are properties completely separately-owned prior to the marriage.
The 10 Community Property states are as follows: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Alaska is the only one considered an opt-in Community Property state. Alaskans can declare properties to be community property by filing the proper paperwork with the state.
What are my Options When Resolving Real Estate Disputes during a Divorce?
If you and your former spouse are attempting to resolve a complicated real estate dispute, there are a handful of options.
Based on your specific situation, you might find that one of these options is the best for you and the other party.
Agree On Dividing Large Assets
If multiple assets are involved, both parties may agree to divide them up fairly. If you can reach an amicable agreement, this route is often the cleanest one.
For example, say you purchased a family home and a summer home, but also owned a timeshare for family vacations and a small plot of land intended for retirement. During your divorce, you and your ex-spouse could agree to give one party the family home and the small parcel of land, while the other party would get the summer home and the timeshare.
Buy Out The Other Party’s Share
Another more clean-cut solution to figuring out who gets what when dividing real estate is to directly buy out the other party’s share of the property.
Just determine the market value of the marital property, establish the partial-ownership over said property, and pay the other party their portion of the current value.
Continue To Co-Own The Home after the Divorce
If you and your former spouse can agree to proceed with professionalism, you can continue to co-own the home as well.
Other legal documents may need to be written up to lay out future agreements based on non-marital habitation or renting/subletting the house to one of the parties or a third party.
Agree To Sell The Home after the Divorce
The final option, which may be agreed upon or determined to be the best route by the court, is to sell the home.
This process can be complicated at times but is often the best way route to take. It is the best way to divide a property that neither party wants to continue owning.
Suddarth & Koor Will Help You Through The Divorce and Real Estate Distribution Process
If you find yourself in need of a Divorce Attorney in St. Charles, Suddarth and Koor, LLC is here for you.
We are trained and certified mediators that have years of experience conducting negotiations in complex financial and emotional circumstances for both uncontested and contested divorce cases.
We understand that the decisions you make during a divorce will impact the rest of your life, and having the right team behind you can make all the difference.
You can contact us today for a free divorce consultation.