Tag Archive for: real estate

Divorce and Its Impact on Shared Real Estate Investments

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While divorce is never easy, additional assets and income streams can further complicate this already stressful time. If you and your spouse have shared real estate investments, be prepared for a long and drawn-out division of assets. Real estate is incredibly valuable, and figuring out how to divide it fairly takes time, patience, and often compromise.

Knowing what to expect is key as you approach your Charleston divorce. With the team at Pence Law Firm by your side, you can feel confident throughout this process. Call us at 304-407-7852 to discuss your next steps.

How Real Estate is Divided in Divorce

Like most states, West Virginia is an equitable distribution state. This means that assets should be divided in a way that is fair, not necessarily a way that is equal. A number of factors are taken into consideration, including each party’s contributions to the marriage, who will be the children’s primary caretakers, the length of the marriage, and each spouse’s financial stability. 

For example, if Spouse A earns $300,000 per year but Spouse B will have their shared children 90% of the time after the divorce, the court is unlikely to accept any agreement that leaves Spouse B without the assets or income they need to meet those children’s needs. Even if Spouse A contributed the most financially, the court will also consider Spouse B’s non-financial contributions.

While the court uses the concept of equitable distribution, these decisions aren’t often left up to the court. It’s more common for couples to negotiate and come to a division agreement with the help of their attorneys.

Weighing Obligations and Benefits

As you consider how you want to handle your shared real estate, think about both the benefits and the drawbacks that come with owning real estate. Real estate is a stable investment that generally increases in value year after year, and it can also be a strong source of income if you live in an area with lots of renters. However, it also requires you to either be a landlord or pay for a property management service, keep the property in a habitable condition, and handle the taxes that come with being a landlord. For some, the benefits of owning property outweigh everything else. For others, having the other party buy them out is the more appealing option.

Using Liquid Assets for a Fair Division of Assets

In high-asset divorces, it’s common to use liquid assets to balance out the division of assets during divorce. Imagine that you no longer want to own real estate investments and you want to strike out on your own as a business owner. Your spouse may agree to buy you out by granting you a larger share of the marital retirement funds or cash. This streamlines the process and can make it easier for both parties to get what they want out of the divorce.

Selling Shared Real Estate

What happens when neither party wants to keep the real estate? Owning real estate investments is a significant responsibility and it does sometimes happen that neither spouse wants to take that on alone. In this scenario, the parties sell the real estate and split the proceeds equitably. 

This can be a bit more time-consuming than the other solutions, as it involves staging the home, contracting with a real estate agent, and cooperating throughout the selling process for each piece of property. But once you make it through that, both parties get what they are owed and can walk away with those financial ties severed. Many divorcing couples find that selling shared real estate gives them a sense of relief and the freedom to move on with their new life.

Whether you know how you want to handle your shared real estate or you’re still not sure what the best option is, it’s good to begin planning for this step early, as it may be one of the most complex parts of your divorce.

Prepare for Your Divorce with Pence Law Firm

The Charleston divorce attorneys at Pence Law Firm are here to help you work through the division of assets, child support, child custody agreements, and the various other major decisions you must make during divorce. Let’s sit down and talk about what matters most to you. Just contact us online or call us at 304-407-7852.

Navigating the Transfer of Real Estate During a High Asset Divorce

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Real estate transfers are a crucial component in many divorces, and they often play an even bigger role in high-asset divorces. High-asset couples often own multiple pieces of property, with some serving as family or vacation homes and others serving as income streams. For this reason, it’s common for the division of assets to be a time-consuming and intense part of the divorce process.

Learn more about what to expect during real estate transfers and how to get what you need out of your split. For more personalized advice as you work through divorce, call Pence Law Firm at 304-345-7250.

Proper Valuation and Assessment of the Property

Proper valuation of every piece of real estate is crucial when you’re going through a divorce. This is especially true in today’s market, which seems to change dramatically on a near-weekly basis. The market has driven home prices upward, which may influence both parties’ decisions regarding selling or keeping the property. 

Investing in a qualified real estate appraiser is crucial, particularly in high-asset divorces that may involve valuable real estate. If both parties cannot agree on an appraiser, you may want to ask your attorney for recommendations or consider getting insight from two appraisers.

This step also involves considering the debts tied to each piece of property. Unless you own each piece of real estate outright, it’s important to consider the amount of debt tied to each property and how much equity is in each property. Again, the current market makes this even more important. If you bought one or more homes when interest rates were low, requiring one party to refinance into their name alone could lead to an unpleasant surprise.

Understanding Equitable Distribution Laws

Once you know what you’re working with in terms of debt, equity, and home value, you’ll have to talk to your attorney about how West Virginia’s equitable distribution laws may affect how the homes are split. West Virginia, like many other states, is an equitable distribution state. This means that assets should be split in a way that is fair, not necessarily in a way that is equal. Rather than both sides getting 50%, the courts consider a range of factors while deciding how each asset should be split up.

It’s important to identify which pieces of real estate are separate property and which are marital property. Even if a property is considered separate, it could still affect how assets are divided. If one party owns five homes on their own and the other spouse owns nothing on their own, the court would likely find it unfair to give each spouse half of the marital home.

One of the most important factors used in equitable distribution is both parties’ financial and non-financial contributions to the marriage and property. This is especially important in marriages involving one high-earner and one spouse who works as a homemaker or stay-at-home parent. It’s common to think about the working spouse’s financial contributions, but the non-financial contributions are also crucial and carry significant weight.

Negotiating the Division

Before you and your attorney begin negotiating with your ex, you should fully understand what is at stake and which outcomes are possible. If you don’t care about the real estate, you can use that to gain some leverage and fight for a greater share of other assets in exchange for giving up your share of the real estate. If you want the family home but are uninterested in the investment properties, that may also guide your negotiations. Perhaps you want to keep one investment property as a passive stream of income but do not want the baggage associated with the marital home. It all depends on your priorities.

Tax Implications

The good news is that property transfers between spouses during divorce are usually non-taxable. However, owning property does come with some tax benefits, so keep that in mind if you plan on signing away your rights to the family real estate. Additionally, if you get one or more pieces of real estate in the divorce and sell them later on, you could be hit with a capital gains tax.

Facing Divorce? Choose Pence Law Firm for Your Legal Needs

We know that divorce leaves you with more questions than answers, and that’s why we’re here to support you every step of the way. Let us help you navigate your divorce and prepare for a new chapter in life. Schedule a consultation now by calling us at 304-345-7250 or contacting us online.