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How real estate investments can complicate a divorce

On Behalf of | Mar 13, 2024 | Divorce

Some couples make one real estate investment together after marriage. They purchase a home where they live and maybe raise their family together. Other couples make more real estate investments as a way to generate income for the family. Perhaps they acquire several cabins that they prepare and turn into short-term vacation rentals. Maybe they purchased several duplexes to rent out to local families. Some people even acquire unimproved land with plans to sell those parcels after many years or several decades have passed, as urban sprawl and appreciation of property values could turn a cheap parcel into a lucrative investment.

People may understand that they have to divide the home where they live in an Indiana divorce. What happens when spouses have other properties in their investment portfolio and they decide to divorce?

Properties are potentially subject to division

If people acquired real property Investments during the marriage or used marital income for their acquisition, then those properties may be part of the marital estate. Even if only one spouse has their name on the deed, both spouses may have an interest in the properties’ value if the couple divorces.

To properly address those holdings, there are several necessities. The first is that people need to establish the fair market value of each property. That may require partnering with a real estate agent or an appraiser. Then, spouses need to consider different solutions for addressing their real property holdings.

Sometimes, each spouse may want to retain certain income-generating properties or long-term investment holdings. Other times, only one may have an interest in owning those investment properties after the marriage ends. Occasionally, the most equitable solution might involve liquidating the investment portfolio to pay off marital debts and divide the proceeds between the spouses.

Divorcing spouses in Indiana typically have the option of establishing those terms themselves or presenting an inventory of assets to the courts and having a judge make the final determination about what would be equitable. Particularly in cases where spouses have an expansive marital estate, a thorough review of marital assets, not just the largest holdings, may be important for someone trying to secure a fair outcome.

As a result of all of these considerations, having an informed plan for addressing valuable marital property can help people achieve the best outcome in a pending Indiana divorce. Seeking legal guidance is a good way to get started.