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What happens to rental properties during a divorce?
Dividing assets during a divorce often proves to be a complex process, given that your hard-earned investments and assets are at stake. Usually, couples could care less about who gets the living room set or the bedroom furniture. However, they do care about splitting valuable assets such as rental properties. Please continue reading to learn about the options available for dividing rental properties when divorcing and how a dedicated Ocean County Property Division Attorney can help you today.
What are the options for dividing rental properties in a divorce?
Firstly, it is imperative to determine whether your rental properties are considered marital or separate property. Marital property is subject to equitable distribution during property division, meaning any assets accumulated during the marriage will be split fairly between the divorcing couple. Separate property, any assets accumulated outside of the marriage, are not subject to equitable distribution. Therefore, if one spouse purchased the rental properties before the marriage, it will not be included during the division of assets. However, if the rental properties were purchased during the marriage, they will be considered marital property, meaning both spouses are entitled to an interest in it.
Dividing rental properties can be a significant concern for couples, as it may be their primary source of income. That said, before you begin your divorce negotiations, you should hire an appraiser to determine the value of each property. It would be best to consider dividing your rental properties with your former spouse.
This option may not surprise you, but you can sell the rental properties and split the proceeds. In most cases, when couples cannot agree on how to divide their rental properties, the court will order them to sell and split the profits. However, if you do not want to sell the properties, you can continue renting and split the proceeds.
How else can they be split?
Forming a business partnership with your former spouse can be challenging, making this option unfavorable. However, if you do not want to sell the properties, this option will help you continue making a profit. If you do not wish to continue to rent, you could devise a plan to split the rental properties. This can be tricky as rental properties usually do not hold the same market value, and couples often do not have an even number of properties. Nevertheless, if you can come up with a fair way to split the properties, you can still profit from your half of the investments.
Furthermore, another costly option is buying out your spouse and retaining full ownership of the rental properties. In some cases, one spouse may be the driving force behind running a successful property. In such cases, they are likely the one who wants to keep the rental properties. If your spouse is willing, you can buy them out. This means you will be responsible for all payments related to the rental properties. If you are willing to take on this responsibility, you may consider conversing with your former spouse about buying their ownership stake in the properties.
If you are unsure how to divide your rental properties when divorcing, contact an attorney from the Law Office of Sarina Gianna, LLC, who can help you determine the best option for your needs.
