How Is Real Estate Property Divided in a High Asset Divorce?

 Posted on September 30, 2020 in Complex Property Litigation

During a high net worth divorce, couples will need to address multiple different types of assets, including financial accounts, vehicles, jewelry, furniture, valuable artwork or collectibles, and family businesses. Real estate, including the marital home, vacation homes, or commercial properties, are often among the most valuable assets owned by a couple, and complex property litigation may be needed to determine how the division of this property will be handled. During the divorce process, spouses should be sure to understand their rights regarding real estate property and the legal and financial issues that they may need to address.

Community Property Vs. Separate Property

The first thing to consider when addressing real estate is determining whether it is considered community property or separate property. Community property includes any assets acquired by either spouse during their marriage, and Texas law requires these assets to be divided equally during a divorce.

A home or other real estate property purchased during a couple’s marriage will be considered community property, while real estate owned by one spouse before getting married will usually be considered separate property that will remain in the possession of that spouse. However, these issues can become more complex if a spouse contributed toward an increase in the value of the other spouse’s separate property during their marriage.

For example, one spouse may have owned a home before getting married, but during their marriage, both spouses may have lived in the home, worked together to make mortgage payments, and invested money or effort in improvements to the home. In these cases, the spouse who owns the home may be required to reimburse the other spouse for their contributions.

Appraisals, Property Ownership, and Tax Considerations

When determining how real estate should be divided in a divorce, it is important to get an independent appraisal of the property’s value. A professional appraiser can determine the proper valuation based on the real estate market and other similar properties in the area.

During the asset division process, spouses may choose to sell a property and divide the profits as part of the marital estate, or one spouse may keep the property, while the other keeps other assets of an equal value. Spouses should be aware that capital gains taxes may apply to the sale of property, and they will need to determine who will be responsible for paying these taxes.

If one spouse will retain ownership of a home, they may need to have it refinanced, and the other spouse’s name will be removed from the title. A spouse should also be aware of property taxes that apply to a home or other real estate and ensure that they will have the financial resources to pay these taxes and other costs related to property, such as utilities and maintenance expenses.

Contact an Austin, TX Complex Asset Division Attorney

High asset divorce cases often involve a wide variety of complex financial issues, and determining how to address ownership of real estate may only be one piece of a much larger puzzle. At Powers and Kerr, PLLC, we can make sure you consider all of the financial matters and legal issues involved in your divorce, and we will fight to protect your rights as you work to dissolve your marriage. Contact our Austin high net worth divorce lawyers today at 512-610-6199.

Sources:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.3.htm

https://www.investopedia.com/articles/realestate/12/real-estate-valuation.asp