The dissolution of marriage can be rough on a family, and even more difficult if real estate is involved. There are complex laws that surround divorce and real estate that add unwanted tension in an already stressful situation. For a couple, their home is likely their biggest asset. Considering the current economic climate, many couples have more equity in their home than they do in their checking or savings accounts. This is why it has become such a troublesome issue in divorce.
There are a number of issues that must be considered when determining how real estate should be divided up after a divorce. In most cases, the real estate is owned by both partners in the marriage; therefore, each client is required to identify as many details types of cases in family court as possible relative to shared real estate. This includes the history and acquisition of the territory, source of funds used to purchase the real estate, improvements done to the property and items therein, current liens, title, and value of each piece.
It’s necessary to first determine the value of the property in question. If the parties can’t reach an agreement, then there are a few different ways to determine value.
Tax assessed value: These values are generally lower than the actual value, sometimes as much as ten to twenty percent. It is usually not given much weight in court.
Appraiser: This is a service that will usually cost about $300 to $400 dollars, but is the most cost effective way for most to get the market valuation performed.
Realtor: This is less reliable than an appraisal but more reliable than tax assessed value. It usually doesn’t cost much to have real estate valuation performed by a Realtor, though, which is attractive to most clients.
Determining equity can be complex, considering that equitably division of real estate is based on each parties respective equitable interests in those assets. In general, equity is determined by aclu women’s rights in workplace subtracting the encumbrances against the property from the Real Estate Value. Encumbrances include anything from second mortgages to any loans secured against the property including mortgages.
Dividing the Assets
It is important to recognize that all assets are considered part of the marital estate unless proven otherwise by a “preponderance of the evidence.” This places a significant burden on any person making a non-marital claim. That is why it is vital that any and all documents including documents of title, receipts, or canceled checks that support your non-marital claims should be provided or the asset will be divided in the divorce.
If the property is awarded to one of the parties, the other party must be compensated for their share of the marital equity. This can be done by awarding other assets, refinancing the mortgage or paying off the share over time. If nothing can be given to equalize the division of assets, the real estate may be sold and the profit divided. Many complications can arise as each divorce is unique, so take the time to contact your attorney as they will be invaluable during this time.