People hoping to ensure their financial stability sometimes choose to invest in real property. Real estate investments might look like acquiring property with the intent to rent it to others. Investors might purchase unimproved land in an area that they believe may see development in the next few decades. Some people become house flippers. They purchase distressed properties and then repair or upgrade them before selling them to others.
Any of these options can help people diversify their holdings. They can also be a complicating factor during divorce. How can people address investment real estate during a Kentucky divorce?
Identifying and valuing properties
Creating a comprehensive inventory of marital assets is one of the most important early steps in the asset distribution process. Spouses need to determine what investments are marital property and what ones are separate property.
Investment real estate owned prior to marriage might remain the separate property of one spouse. Properties acquired as part of an inheritance that people choose to hold as investments could also remain the separate property of one’s spouse. Real estate purchased during the marriage or improved using marital income could be at least partially marital property.
Spouses need to know what each individual property is worth by establishing a realistic fair market value for their holdings. This process may require the assistance of an appraiser or a real estate agent. Once spouses know what they have to divide and what those holdings are worth, they can start discussing realistic solutions.
Deciding what to do with individual properties
There are multiple different solutions when addressing investment real estate in a Kentucky divorce. Sometimes, the spouses might agree to sell their holdings and then share the proceeds from those sales with one another.
Other times, one spouse may want to continue repairing and flipping homes or working as a landlord. They might negotiate to retain sole ownership of one or all of the investment properties. Doing so likely requires that they give up their interest in other marital assets or accept responsibility for far more marital debts.
Occasionally, each spouse may have an interest in retaining certain investment properties. Spouses can negotiate an arrangement where each spouse keeps certain parcels or homes. Finally, it is sometimes possible for spouses to arrange for continued joint ownership after the divorce. Such Arrangements typically require thorough discussions about how spouses may share revenue generated by the properties or financial responsibility for them in the future.
If spouses cannot settle their disagreements, then they may need to ask a judge to review their case. Having a realistic idea of what to expect during complex property division proceedings can help those who need to prepare for litigation or who want to negotiate a settlement with their spouse. Real property holdings are high-value assets that require careful attention as people prepare for divorce.
