What Happens to Real Estate in a Divorce?
The average age of people going through a divorce has increased in recent years. In fact, the divorce rate in the United States for people over the age of 50 has doubled since 1990. Divorcing at 30 may be as simple as determining alimony, child support, and a division of the parties’ bank accounts. Divorces involving older parties, however, are likely to include more complex issues. People accumulate wealth and more complex assets over time. For parties who invest in real estate, including both family homes and commercial properties, how will the divorce affect their ownership? Continue reading this article for a discussion of what happens to real estate in a divorce.
Nevada is a community property state. This means that any asset that is part of the marital estate will be divided between the divorcing spouses. Community property includes any property acquired during the marriage, with certain notable exceptions, regardless of whose name is on the property’s title. For the sake of simplicity, we will ignore those exceptions for now.
Assuming the parties acquire a house or another piece of real estate together during the marriage, then that property will be divided between the parties in a divorce. Unlike bank accounts or stocks, real property cannot be readily split in half. Parties in a divorce typically have three options for dealing with jointly-owned property:
- Buyout. Perhaps the simplest option involves one party buying the other party’s interest in the property. If a residential or commercial property has a net value of $900,000, then one spouse can pay the other spouse $450,000 in cash or other assets distributed as part of the divorce. The net value of the property accounts for outstanding mortgages and other issues such as unpaid property taxes or HOA fees as of the date of the decree of divorce. Typically your Las Vegas divorce attorney will retain an accredited appraiser on your behalf to determine the property’s value. In some cases the divorce lawyers representing each spouse will agree on the appraiser. In other cases each party will hire their own appraiser.
- Sell the property and split the proceeds. If the parties cannot agree on a buyout value, or if neither party can afford to buy out the other, or if neither party wants to own the property, the parties can sell the property and then divide the sale proceeds.
- Partitioning. Partitioning is a more complex option, subject to local zoning and other regulations, and is only available where partitioning is possible and realistic. If a couple owns an apartment complex with eight units, for example, then the parties could split the complex and each retain ownership of four units. Acres of farmland or other large pieces of real property can, at times, similarly be split. Partitioning does not work for dividing up the family home, as it is impractical to split ownership of a residential property.
Not all property is community property. If one spouse owned property before entering into the marriage, which they bought separately from their spouse, then that property might not be part of the marital estate. Likewise, property governed by a prenuptial or post-nuptial agreement, or obtained through inheritance or third-party gift to one spouse may be sole and separate property – even if acquired during the marriage. If the property has increased in value through the sole effort of the individual owner or through no effort of any party but due to the passage of time, then the increase in value may remain separate property as well.
If the non-owning spouse contributes to the other spouse’s sole property through improvements or renovations, or if community funds (such as a joint bank account) were used to pay for taxes, mortgage payments, or improvements and renovations, then some or all of the value of the property may be converted into community property. If the joint investment in the property is substantial, then the property may be generally converted into community property, and the parties can explore the options discussed above to divide the value. There are no hard and fast exact mathematical formulas to determine the ownership attributes of property that has been commingled. Your divorce attorney will know what property value is community and what value is sole and separate based on your individual case facts.
Call Our Expert Divorce Attorneys in Las Vegas
Our seasoned divorce lawyers in Las Vegas are ready to guide you through all aspects of your divorce case. They have decades of experience dealing with complex and high-asset divorces, and are well-versed in navigating even the most complicated and sensitive of marital law issues. We are prepared to help you understand how your specific case facts can be used to your advantage. This includes property valuation and equity distribution to child custody, temporary spousal support and alimony. Divorce attorneys Jennifer V. Abrams and Vincent Mayo offer courtesy phone consultations at no charge. Call 702-222-4021 to speak with one of them about your important divorce matter concerns.
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