Divorce and Your Real Estate

 For most couples the family home is the highest valued asset they will have to divide in their divorce. Its division is usually fraught with controversy for varying reasons. It may be difficult to value, is not readily converted to cash, costs a substantial amount of money to maintain and has implications of federal and state tax liability.

As if all those things were not enough, your family's emotional attachment to your real estate, in particular a family or vacation home can cause you to make an irrational or poor decision at the time of the divorce. Your family may be haunted by that decision for years after your divorce.

Some questions that you need to answer are:
· Should you sell the family home?
· Do you keep it until the children are grown?
· Should you keep the home and buyout your soon to be ex-spouse, or vice versa?
· Can either of you afford to keep it after the divorce?

The answers to these questions and others can help you avoid or plan for problems associated with your real estate. Historically, the family home is the asset that most often causes controversy both before and after a divorce.

The principal reason for this problem is the timing of the sale of the home and the division of the net proceeds. Both events frequently occur some time after the divorce. In addition, couples seldom plan as they should for the payment of household maintenance and upkeep during the divorce. At first glance the family home appears to be the easiest asset to identify and describe. For purposes of a divorce, the description of your ownership interest in your home and other real estate can be very complicated with pitfalls for the unwary. As with the division of personal property, the rules and laws regarding the division of real estate vary from state to state.

There are several key factors about your real estate that affect the handling of the asset or the distribution of the net proceeds from the sale of the asset in a divorce.

The factors are:
· identification of the type of real estate and the type of ownership interest you have
· the ownership history of your real estate
· real estate, income and capital gain taxes
· Value and debts, such as loans and tax liens, that are secured by the real estate
· A plan to pay for and maintain the real estate during the divorce and afterward

Most importantly be sure to seek the guidance from trained professionals. Be sure to choose not just an attorney but a CPA, Financial Planner and Real Estate Professional to assist you in analyzing your options to come up with a new plan for our future.

Joan Rogliano is not just a Realtor but she created the Wildflower Group, an organization that strives to empower women with practical information about real estate investing and home ownership. Please visit the Wildflower Group web site for the next free workshop information