How Real Estate Is Treated In Case of a Divorce
Real Estate in Divorce
The rate of divorce cases has increased rapidly over the last few years. In the USA, for instance, the rate of divorce cases for people aged 50 and above has doubled since 1990.
Divorce at 30 may not be as complicated compared to divorce cases in older parties, and this is because people create and grow wealth in asset form over an extended period. When younger parties divorce, they determine the division of alimony (NRS 125.150), child support responsibilities, and bank accounts. We can expect more complex issues to crop up for older parties involved in a divorce.
It is a rather complex matter when the parties with investments in real estate are involved in a divorce case and have to share ownership interests in a residential home or commercial real estate. The involved parties must understand how divorce affects their collective and individual ownership of these assets.
This article details what happens to a piece of real estate during a divorce.
Community Property
In Nevada, divorcing spouses share any asset acquired during the subsistence of the marital relationship because it is a community property state.
Though there are specific exceptions, community property in Nevada comprises all property bought or obtained during marriage life, irrespective of whose name is on the title to the property. For now, we would refrain from expounding on the exempted properties to keep this discussion simple.
If the divorcing parties acquired the property (housing or land) during the lifetime of the marriage, then they will share ownership interests in the subject property.
It is not possible to split the nature of real estate into halves like bank accounts or stocks. Therefore, the parties in the divorce have to deal with the jointly-owned property in either of these three ways:
One Party Buys Out Ownership Interests of the Other Party
This option might be the easiest for the divorcing parties; one party buys off what the other party owns in the piece of real property. For instance, if the family home or another commercial real estate establishment is worth $900,000, one spouse might buy off half of the stake by paying the other spouse $450,000 (or trade in an asset worth $450,000).
Remember, we are talking about the net value of the property, meaning the outstanding value of mortgage debt, unpaid property taxes, or HOA fees must first be deducted from the property’s fair market value as determined by a registered property appraiser.
Usually, your Las Vegas divorce attorney will take responsibility for sourcing an accredited appraiser who will value the property as it is. Additionally, it will smoothen the case if both parties in the divorce can agree on a single appraiser or if both parties hire their appraiser and agree on the value.
Sell the Property and Share the Sale Proceeds
Instances when both parties opt to sell off the property and share the proceeds from the sale, can occur when involved parties cannot agree on the buyout value, when neither spouse has enough capital to buy out the other, or when neither of the parties wants to hold on to the property after the divorce is formalized.
Partitioning the Property
Partitioning the property may not always be possible because of the limitations of local zoning rules and the nature of the real estate. Partitioning is only possible where the law permits and where it is realistic to divide the property physically.
For instance, it is only practical to split ownership of a residential establishment by significantly altering the house’s structural and architectural design.
On the other hand, each party can retain four housing units in the commercial establishment if the divorcing parties share an apartment complex of 8 units. Undeveloped land or farmland can also be subdivided into two pieces, and spouses can obtain titles to the two land pieces.
What is a Separate Property?
Well, not all property obtained during the marriage is considered community property. If one of the parties in a divorce bought a property before getting married to the other spouse, that property is not marital.
To know more, you may read NRS 123.130.
Also, a property whose ownership is limited by a prenuptial or post-nuptial agreement, property obtained through inheritance, or property gifted solely to one of the spouses as a gift is considered separate property. It is regardless of whether the property was gifted or inherited during the marriage life.
The value of the separate property has increased over time without input or capital injection from the other party. In that case, the increase in value remains separate property, and marriage does not affect ownership.
Regarding the Inventory of separate property, you may refer NRS 123.140.
However, if the non-owning spouse has contributed to the spouse’s sole property by financing improvements, renovations, payment of taxes, or mortgage service, then some or all of the property’s value may be treated as community property.
Suppose the contribution to the spouse’s sole property by the other spouse is significant. In that case, the entire property may be considered and treated as community property, and other options to share the property in case of divorce, like the ones discussed above, can be explored.
It is a complicated task to determine ownership contributions by a spouse and specific attributes of a property. That is where you need to consult your divorce attorney, who will help you know what amount of the property value is community property value and what is separate property value based on a case-by-case examination.
Contact Our Expert Divorce Attorneys in Las Vegas
We have one of the most seasoned divorce lawyers in Las Vegas. We are eager and ready to guide you in all aspects of a divorce case.
We have extensive experience dealing with complex and high-value divorce cases with a concrete success rate on the most complicated and sensitive marital cases.
We want to help our clients understand specific areas in a divorce case that they can exploit, such as property valuation, equity distribution, child custody, alimony, and temporary spousal support.
We at divorce attorneys at Donn W. Prokopius, Chtd. provide phone consultancy services at no charge.
Call us today at (702) 474-0500 and speak to one of our professionals about your divorce case.
For more information on how https://dwp-law.com/ can help you with What Happens To Real Estate In A Divorce, please contact us at (702) 474-0500, or visit us here:
Donn W. Prokopius, Chtd.
3407 W Charleston Blvd, Las Vegas, NV 89102