Investing in real estate is common for many adults. These efforts often extend beyond purchasing a marital home. Investments can include vacation homes, rental properties and other real property. While these assets are potentially beneficial for a couple, they can quickly become a source of contention if spouses seek a divorce.
One of the first things that anyone in this position needs to do is to determine if the fate of the real property at issue is governed by a prenuptial or post-nuptial agreement. If one is in place, the assets will be distributed in accordance with the terms of the prenup or postnup.
Dividing real estate if there’s no prenup or postnup
If there’s no marital agreement in place, the real estate of concern will be divided via negotiation, during mediation or per the terms of a court order post-litigation. Negotiation and mediation allow both divorcing parties the opportunity to try to work out an agreement about who gets what properties. If the case goes to trial, the court will make that determination.
In West Virginia, any property acquired after the marriage, with very few exceptions such as certain inheritances, is subject to equitable division during a divorce. It generally doesn’t matter whose name is on the title or deed.
Valuation of the property
Regardless of the method of division, any particular property will have to be valued. This should be done by a neutral third party, such as a real estate appraiser, who can provide an accurate valuation. Once this is done, that information can be used as the basis for determining who will receive which properties.
Options for properties
Real estate properties can be divided between the parties, but that’s not the only option. If the properties are income producing, both parties may agree to continue joint ownership under a partnership agreement that outlines who is responsible for various aspects of ownership and what benefits, including profits, each person will receive.
Another option is to sell all or some of the properties. This option may be beneficial if there are marital debts to pay off or if any of the properties have financing that need to be paid. If the properties sell for more than the debts or financing balance, the remaining proceeds can be split between parties.
There are many considerations, such as capital gains and other taxes, that have to be factored into the outcome of the property during the division process. Working with a legal representative who can assist with determining how various division methods will impact each spouse may be beneficial accordingly.