You have numerous properties thanks to a life of investing, but now that you and your spouse want to split up, you’re not sure what’s going to happen. You know that your assets won’t necessarily be divided equally, but you’re not sure what’s really fair.
You owned one property prior to your marriage, and it’s rented out now. This home may be excluded as separate property, in some cases, so long as no marital money contributed to that property during the marriage. If it did have marital money going to it, then the likelihood is that your once-separate property is now marital property.
Income properties, like rental units, are subject to division on divorce assuming that the property is in both names and that it was purchased during the marriage. However, if only one name is on the title, the court can’t necessarily ask you to sell the property or to transfer it to the spouse who is not on the title. Instead, your spouse can ask for a monetary award that would be fair based on the property’s value.
If you live in the property that is under discussion, then you can sell it and split the profits, refinance it in one person’s name and give a monetary award to the other, or decide on other methods that work better for your situation.
What should you do if you and your spouse argue over each property’s value or distribution method?
Usually, you can use a mixture of distribution methods when you own more than one property. For example, if you own 10 properties and three were purchased by your spouse before marriage while two were purchased by you before marriage, you both might agree to keep your original properties and to negotiate the terms of the remaining five properties.
If you don’t want to sell the properties, you might get their values assessed and divide them between yourselves based on their worth. If you don’t mind selling, you could sell each of the properties and divide the profits in a fair manner. That might be 50-50, 30-70 or another division depending on a variety of factors that influence your case.
Deciding how to divide property isn’t always easy, but if you take it one step at a time, you can come up with an arrangement that makes both parties happy in the end. It may take patience, but through negotiation, it’s possible to resolve property disputes.