If you own real estate and want a divorce, you should consult a lawyer. Dividing up marital property is a major part of many divorces. Real estate in particular could be difficult for you to divide because it can’t easily be split in half. There’s also the issue of what happens to property owned solely by one spouse. Make sure to consult a divorce lawyer if you plan to divorce but own property.
Marital Property Division and Real Estate
During a North Carolina divorce, your marital property gets divided up between you and your spouse. The default method for property division is called equitable distribution. All marital property (meaning generally, all property acquired during the marriage or improved upon during marriage) is divided between the two spouses. The court considers a list of factors in deciding who receives which property. Some of the factors include the spouses’ income and debts, any child support or alimony they already pay, the age of each spouse, and the length of the marriage.
Divorcing spouses can decide on different distribution methods than equitable distribution if they would like. For example, spouses can sign a separation agreement stating that one spouse will receive a piece of real property that they jointly own. The other spouse might receive something else in exchange for giving up rights in the real property.
Note that any separate property that the spouses own is not divided during the property distribution process in a divorce. Spouses keep their own separate property. However, any separate property improved upon during the marriage may be considered marital property. For example, if a husband buys a house before marriage, and he and his wife use their salaries to pay for renovations to the house, it may be considered marital property in their divorce.
Options for Dividing Real Estate
Spouses who are concerned about dividing up their real estate have several options. First, you can sign a prenuptial or postnuptial agreement explaining what will happen to the real estate. If you are already married and plan to divorce, you may need different options. You can mutually agree on a solution in your separation agreement or a divorce settlement, or you can let the judge decide what to do with the real estate.
Possible ways to dispose of real estate in a divorce include:
- Putting the property on the market, and dividing the sales proceeds between the spouses
- A buyout where one spouse buys out the other’s share of the property
- Co-ownership after the divorce
There are pros and cons for each of these approaches and you should discuss your options with your divorce lawyer. Talk to your lawyer about factors that could affect the real estate’s value and how it is divided. For example, a judge might decide that one spouse receives a larger share of the sale proceeds because he or she put more money into the property during marriage.
You might wonder how to assess the real estate’s value if you sell it or do a buyout. Whether it’s a sale or a buyout, you will want the most accurate estimate of the house’s value. Relying on its original sale price or outdated estimates is not a good idea when the property’s value could substantially affect your finances after divorce. You may need to consult a real estate professional or a financial professional for assistance – ask your lawyer for help with this.
Property Owned by One Spouse
As mentioned above, property solely owned by one spouse may be considered separate property in a divorce. If the spouses used their income to improve or maintain the property during marriage, however, a court might deem the real estate to be marital property instead.
If you own real estate prior to marriage, tread carefully as you prepare for getting married. You should talk to a divorce and family lawyer about your options. You and your spouse may decide to sign a prenup – an agreement that can allow you to keep your real estate as separate property. Or you may decide to use a separate account unconnected to your marital finances to maintain your separate property real estate.
Learn More about Real Estate and Divorce with New Direction Family Law
The team at New Direction Family Law is available today to answer your questions if you are ending your marriage. We can assist you with divorcing when you own real estate alone or jointly with your spouse. Our attorneys are knowledgeable, effective, and compassionate professionals who will help you understand your legal rights. We proudly serve clients in North Carolina, including Wake, Johnston, Durham, and surrounding counties. Contact New Direction Family Law at (919) 646-6561 to schedule a consultation, or visit us at our website.