Dividing Real Estate During A Divorce

Property division is a major part of the divorce process, especially when the couple owns one or more pieces of real estate. The family home, vacation properties, rental units, or land holdings all carry both financial and emotional value. Deciding what to do with these assets is often one of the more involved parts of reaching a final settlement.

Determining If The Property Is Marital Or Separate

Before any property is divided, it must be classified. In most states, assets are either considered marital property or separate property. Marital property typically includes real estate purchased during the marriage, regardless of whose name is on the title. Separate property is usually limited to property owned by one spouse before the marriage or acquired as a gift or inheritance.

It’s not uncommon for a home to start as separate property and later become marital. For example, if one spouse owned a house before the marriage but both contributed to mortgage payments or renovations after the marriage, the home may now have marital value.

Options For Dividing The Property

Once the real estate is identified as part of the marital estate, couples have a few options. One spouse can buy out the other’s share, they can agree to sell the property and divide the proceeds, or they can choose to retain joint ownership for a set period of time.

A buyout allows one spouse to keep the home, usually in exchange for giving up other assets of equal value. This option works best when the buying spouse has enough resources to refinance the mortgage and remove the other spouse’s name. Selling the property is common when neither person wants or can afford to keep it. This option provides both parties with a clean break and cash to use toward new housing or other needs. An experienced real estate lawyer can help you and your spouse explore different options.

Tax And Financial Considerations

Real estate often comes with tax consequences. Selling a home could trigger capital gains taxes, depending on the amount of profit and how long the property was owned. Refinancing may involve new loan terms and closing costs. It’s also important to consider property taxes, insurance, and maintenance expenses when calculating the real value of a property settlement.

A divorce lawyer with experience in property division can help clients weigh these factors and make informed decisions. Attorneys like those at The Spagnola Law Firm can attest to how important it is to fully evaluate both short-term and long-term impacts before finalizing any agreement.

Dividing property is rarely simple, but with the right legal and financial support, it can be handled in a way that protects both parties’ interests. Real estate is often the largest asset a couple owns, so careful attention is needed when deciding how to handle it during a divorce. Whether through a sale, a buyout, or temporary co-ownership, the goal should always be a clear agreement backed by proper documentation. Call an attorney today to get the help you need!