For many divorcing couples, the family home is the single most valuable asset they own. Whether it’s a small house in a suburban neighborhood or a sprawling home on acres of land, that home may also hold a great deal of memories.
Determining what to do with your home can be a difficult and emotional decision. It also may not be the only real estate you have to split in the divorce. Many couples own at least one rental property as well. That can play a significant part in your property division negotiations. Let’s look at a few things to consider.
Is the home marital property?
If this is your “starter home” from when you were first married and both of your names are on the title, it’s clearly marital property. But what if it’s a condo one of you owned before you were married, and you kept it to rent out for some extra income?
Even if only one of you is on the title, if the other spouse contributed to its maintenance, upgrades, taxes and insurance and shared the income it has generated, they can likely make a strong case that it has become marital property.
What are your options?
If the home is determined to be marital property, you basically have the same options as you do with your family home. One of you can keep it and give your spouse another asset in exchange for your share. Selling it and dividing the proceeds is another option.
What if the rental income is too good to give up, and you have a long-term, low-maintenance tenant? You may decide that the best thing – at least for the foreseeable future – is to keep it and continue to work together as landlords.
The question is whether or not you can do that. If your divorce is amicable, you may decide that you can. In that case, you’ll need to put an agreement in place to codify things like how expenses and income will be divided and how responsibilities will be shared. This is especially crucial if only one of you is on the title and/or mortgage.
Having experienced divorce and real estate legal guidance will help you determine all the options, decide which is best, and work toward seeking the outcome you want. The right decision can help you move forward on solid financial footing.
