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Three steps to help split real estate during divorce

Those who go through a divorce will generally need to account for and split all marital assets. One of the most valuable assets to split is real estate. Some couples will need to decide how to handle a family home, while others will also need to account for vacation homes and additional properties.

Step #1: Is the real estate marital property?

When splitting these assets, the first step is to determine whether or not the asset is marital property. This term refers to assets acquired during the marriage.

If the couple purchased the property during the marriage, it most likely qualifies as marital property. However, in some cases, even property purchased before the marriage may qualify as marital property. Courts will take various factors into consideration to support an argument that property bought prior to the marriage should count as marital property. Examples the court may consider when making its determination can include whether or not the couple used marital funds towards upkeep, maintenance or the betterment of the property and how the couple used the property during the marriage.

Step #2: What do you want?

Next, it is important to consider what you want to get out of the divorce. Are you interested in a specific piece of real estate, or would you rather have a larger portion of another asset, like certain stocks or the full ownership of a business? Get a better idea of your long-term goals before beginning negotiations.

Step 3: How should the property get split during the divorce?

Property is generally split in one of three ways: one party takes on the property, the property is sold and the proceeds are split between the parties, or both parties keep an interest in the property. Figure out which of these options fits your needs best and develop a negotiation strategy.

It is important to carefully account for these and other assets during the divorce proceeding. The divorce settlement agreement should include provisions to solidify the division and mitigate the risk of surprises in the future.

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