Divorce Help 101
Real Estate
Real estate, or property, acquired during a marriage or otherwise determined to be marital property can be divided during a divorce. While people can become quite anxious about how a home, building or land is to be divided, there are really only three major options as to what can be done with property; however, keep in mind that the laws regarding property may vary from state to state.
1 – the Husband can buy out the Wife’s interest.
2 – the Wife can buy out the Husband’s interest, or,
3 – if neither party can or wants to buy out the interest of the other, the property will be sold and the funds remaining after closing will be divided between the parties.
However, while these options may seem straightforward, they can be easily become complicated. For instance, for one party to buy out the interest of the other, not only must the party buying out the other’s interest be able to finance and carry a mortgage on their own – or have adequate capital to outright by the asset the parties must also be able to agree on a fair market value for the property. This is generally determined by an appraisal which also requires the parties to agree upon an appraiser and to also pay for this professional’s services.
Sometimes a person will simply be satisfied to have their spouse keep a piece of real property and only remove their name from the deed; however, this is rarely a good idea. A good rule of thumb is to avoid joint ownership of property with a former spouse. For example, if you deed your interest in certain real property to your spouse, but remain on the mortgage, you run the risk of drastic consequences. First, when you attempt to buy a home of your own or to otherwise obtain credit, the house in which you have no ownership interest will show as a debt on your credit report. To take this one step further, if your spouse defaults on the loan even though you have surrendered your ownership interest in the property the mortgage company, under the mortgage that you and your former spouse signed, can seek to hold you responsible for the loan.
However, remember that while a house or some other piece of real property may be the largest or most valuable property in the marriage, the mortgage debt must be considered when determining the value if one party is keeping the property as a division of property no only includes assets but also debts. It is not unusual for a party to receive the house and mortgage and no other marital debt or to also receive a number of other items of property to offset the debt.
Remember that generally all property is grouped together then divided so if there is a large retirement account one party may keep that in lieu of other real property. It is also possible to use property to offset other obligations such as alimony or other support.
Each case is different, but in the end can generally be approached using the steps above.
Disclaimer
1 – the Husband can buy out the Wife’s interest.
2 – the Wife can buy out the Husband’s interest, or,
3 – if neither party can or wants to buy out the interest of the other, the property will be sold and the funds remaining after closing will be divided between the parties.
However, while these options may seem straightforward, they can be easily become complicated. For instance, for one party to buy out the interest of the other, not only must the party buying out the other’s interest be able to finance and carry a mortgage on their own – or have adequate capital to outright by the asset the parties must also be able to agree on a fair market value for the property. This is generally determined by an appraisal which also requires the parties to agree upon an appraiser and to also pay for this professional’s services.
Sometimes a person will simply be satisfied to have their spouse keep a piece of real property and only remove their name from the deed; however, this is rarely a good idea. A good rule of thumb is to avoid joint ownership of property with a former spouse. For example, if you deed your interest in certain real property to your spouse, but remain on the mortgage, you run the risk of drastic consequences. First, when you attempt to buy a home of your own or to otherwise obtain credit, the house in which you have no ownership interest will show as a debt on your credit report. To take this one step further, if your spouse defaults on the loan even though you have surrendered your ownership interest in the property the mortgage company, under the mortgage that you and your former spouse signed, can seek to hold you responsible for the loan.
However, remember that while a house or some other piece of real property may be the largest or most valuable property in the marriage, the mortgage debt must be considered when determining the value if one party is keeping the property as a division of property no only includes assets but also debts. It is not unusual for a party to receive the house and mortgage and no other marital debt or to also receive a number of other items of property to offset the debt.
Remember that generally all property is grouped together then divided so if there is a large retirement account one party may keep that in lieu of other real property. It is also possible to use property to offset other obligations such as alimony or other support.
Each case is different, but in the end can generally be approached using the steps above.
Disclaimer
