Real estate investments are a popular option for those seeking to diversify their holdings. Spouses who invest in real estate might acquire vacant land to hold for years or decades, waiting for development opportunities.
People purchase homes in mediocre condition and renovate them to resell them. They may also rent properties to produce a stream of income. When spouses have investment real estate, the property division process of a divorce can become much more complex. Appropriately addressing investment real estate can be a challenging process.
There are many viable solutions
Spouses who need to divide investment real estate when they divorce have several options available to them. The law requires a fair or equitable distribution of marital property, and spouses can get creative when seeking equitable terms.
They can agree to sell some of their holdings, which allows them to then divide the proceeds from the sale. They may agree to divide ownership so that each spouse retains some of the properties. In cases involving rentals or house flipping, one spouse may have more reason to retain investment properties than the other and a stronger ability to monetize them. Spouses can potentially offset the value of investment real estate with other marital property.
In cases involving long-term investments and real estate used to generate revenue, spouses might even negotiate agreements that allow them to retain joint ownership of the property after they divorce. Each of these solutions offers certain benefits and poses unique challenges for divorcing couples.
Consulting with an attorney can help people facing high-asset divorces set reasonable goals for property division. Those with real estate investments may need guidance as they value their assets and begin negotiating property division matters, and that’s okay.