Real Estate Divorce Specialists
Real Estate Divorce Specialists are real estate professionals specializing in divorcing clients. They are trained in the legal and tax aspects of the divorce process as it relates to real estate. They learn obscure legal rulings, regulations, and tax implications. This specific training allows them to help their divorcing clients take advantage of tax laws that are specific to selling a house in divorce. .A real estate professional who understands the special problems and laws that govern the dissolution of a marriage can be a great asset at a very difficult time.
Some things you may not know:
1) Colorado is an Equitable Distribution State. This means the parties decide what they think is fair and if they can't agree, the Court decides. It is not based on 50/50 like community property states.
2) If a property was acquired during the marriage, it does not matter whose name is on Title. Even if your name is on Title, you no longer have the right to sell the property if a divorce is impending, unless there is a temporary order allowing it.
Two Different Kinds of Property
Marital Property – Any property acquired by either spouse during the marriage regardless of how it’s titled…from the start of marriage until the time it ends. In Colorado, it’s also the increase in value of separate property.
Separate Property – What you bring into a marriage (and keep in your name). What you inherit during the marriage. What you receive as a gift during the marriage. Must stay in that person’s name only, can’t be jointly owned.
Transferring the Deed
Many couples forget to change the title after a divorce. Make sure it's written into your documents that this will be done within so many days after the divorce is final. You don't want to overlook this detail and then try to sell your house years down the road and find out you cannot find your ex...or worse yet, he/she is dead and cannot sign off on the sale.
Ways to Divide a Home
1) Sell the house up front and divide the profits.
2) One can buy out the other. This can be done by trading another asset for the interest in the home.
The value must be determined first. Get an appraisal. The fair market value of the house minus the mortgage will show the equity in the house.
3) Let's say wife wants to keep the home, but there's not enough value in another asset to offset the value. She could refinance the home to withdraw enough cash to pay off husband, but what if she can't afford the higher mortgage payment? Something to consider. Instead of refinancing the house, she could owe a sum to her ex-husband, which is paid over time (via a property settlement note). A note would include reasonable interest and it should be collateralized with a deed of trust on the property.
One thing that should be considered is subtracting selling costs. Let's say there is $50k equity in the house and wife wants to stay in the house. Husband says I'll take the 401k that's worth $50k. Seems fair. But wife has to pay real estate fees to ever get her equity. Maybe that should be considered in the settlement.
There are special rules relating to divorce when it comes to capital gains. You will want a knowledgeable attorney and good accountant for advice regarding capital gains taxes. Let's say there is $300k equity in the home and husband says you take the home and I'll take the 401k worth $300k. Seems fair. But have you considered capital gains taxes you might have to pay? Probably not. You can protect yourself by doing certain things and having certain things written in your decree.
Getting Cash from a 401k without Paying Penalities
If you are awarded some of your spouse's 401k money via a QDRO (Qualified Domestic Relations Order), you can use that money now without paying penalties. This is worth some investigation. Call me or email.
Why Consider a Certified Real Estate Divorce Specialist
There is so much to consider regarding the financial aspect of divorce. Having a specialist at your side can help ease the transition and offer suggestions to streamline the process.
Please contact April DeNio at (719) 313-3813 or email at firstname.lastname@example.org. I can assist you in finding a specialist in your area also.
Visit the Real Estate Divorce Specialists Website.