Divorce and Real Estate: What Happens to the Property?

Divorce and Real Estate

Divorce and real estate law are frequently overlapping areas of the law. When a couple decides to divorce, determining who gets what property is usually one of the main issues. For example, if they co-own a home, do they keep it? So, how about automobiles? Can he buy his ex-wife out for more than she contributed to the marriage if there is an unequal distribution of wealth between them? What if they have a family? The following sections address these and other concerns about real estate in divorce proceedings.

Ask for Professional Advice

Seeking professional advice is the best way to ensure that everything goes as smoothly as possible when selling or buying real estate during a divorce. This procedure can be intimidating, especially when children get involved.

According to The Law Firm for Family Law, “there are many complexities when marital assets and liabilities are involved.” Therefore, It is preferable to have someone familiar with the law, such as a Clearwater family law attorney, to guide you through these proceedings. Having an experienced attorney can help you avoid any potential conflicts or misunderstandings that could arise and add stress to an already stressful situation.

Regarding divorce and real estate, keep in mind that the property does not automatically pass to the spouse who owns it on paper. In most cases, the couple is free to agree on any other form of asset distribution that they deem appropriate.

If one spouse keeps the house, they must pay the other spouse their equity share. Furthermore, the spouses must pay all taxes and liens from the proceeds once they sell the home. If they can’t afford these fees, they’ll have to return to court and ask for more time.

What Happens to the House If The Couple Bought It Together?

If a divorcing couple owns their home jointly and did not purchase it with equitable distribution, one spouse may get forced to pay the other’s equity share when they sell their home.

Assume you and your ex-spouse jointly own a $100,000 home and end up paying $10,000 in legal fees for mediation and other costs during your divorce proceedings involving asset division. You’ll have to split the remaining balance of your half ($90,000) with your ex-spouse.

Some couples may agree to a different distribution method, such as a house sale or buyout. When a couple decides on equitable distribution, they should write it down, so there is no later confusion about who owes what and to whom.

Is It Better to Refinance Before Selling Property?

Refinancing a home before selling it is more financially advantageous for some divorcing couples. If you cannot afford a down payment or closing costs on another home, you may want to consider refinancing with your children, splitting the cost.

Even if they agree not to pursue ownership rights in that home, they are still responsible for making payments on behalf of both spouses, allowing one spouse to make an easier transition into purchasing another home without incurring unnecessary financial stress.

Protecting Spousal Rights During Real Estate Transaction

Divorcing couples must protect their spouse’s interests at all times when selling or buying real estate. If your partner is not financially prepared, you may want to consider splitting these costs before proceeding with a purchase or sale without their assistance.

These transactions can become extremely difficult if there are disagreements between spouses due to unforeseen circumstances that they could not predict when they signed the agreed-upon contract. It would be preferable for both spouses to reach an amicable solution before proceeding with this process.

Who Pays for Real Estate Tax Liens, and How is it Divided?

When divorcing, spouses consider how to divide their assets. Taxes are one area that can become very confusing for divorcing couples, especially when attempting to coordinate how they will handle them throughout the proceedings.

It is also possible that you and your spouse did not pay property taxes on a home. Still, You will pay these penalties out of your marital settlement like any other financial obligation owed by either party.

Bottom Line

Real estate is a complex process, especially during a divorce. As a result, it can be very beneficial for divorcing couples to seek professional help before proceeding with any transaction. This will make the entire process smoother and less stressful while also protecting both parties’ interests at all stages. Remember that there are numerous factors to consider when selling or buying property during a divorce. They range from tax penalties to purchase costs, all of which may impact your final agreement with your spouse moving forward.

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