The property division phase of a divorce can seem overwhelming, especially with the involvement of complex assets.
Real estate investments can cause particular concern since rental properties generate income, but of primary consideration is the disposition of the family home.
Dividing real property
When you are facing property division, you will need to engage the services of a professional to place a value on your real estate investments. Factors that will play a role in the division of individual properties are whether a property was purchased before or during the marriage or whether it was an inheritance. The tax implications on a rental or vacation property will differ from the tax obligations related to the family home.
Selling the family home
If you and your spouse decide to sell the family home, look for comparable sales within the last six months to help establish a selling price for your property. Make adjustments to reflect the fair market value. For example, if you added a deck and comparable homes do not have decks, you should add the cost of building this outdoor space to the fair market value.
Conversely, you need to subtract the cost of a mortgage or home equity loan from the value to arrive at the amount of equity you and your spouse have in the home.
Keeping obligations in mind
Remember that keeping the home usually means making mortgage payments. You will also need to pay property taxes and the house will require repairs from time to time. Will these costs fit into your post-divorce budget? With legal guidance, you and your spouse can determine the proper disposition of the family home and other important real property assets.