A divorce can be chaotic and tumultuous, and you have probably already experienced some of the frustrations that accompany the separation of your combined lives. You and your spouse may have clashed over certain treasured items, the family home or the retirement account.
Even if you and your soon-to-be former spouse have reached some polite agreements about how to divide your marital assets, that type of cooperation may not be so easy if you also have investment properties.
Determining who owns what
Depending on the state in which you live, even if you owned the property before you got married, certain factors may exist that give your spouse rights to the property or to the proceeds from its sale, including:
- Your spouse was responsible for the management and upkeep of the property.
- Your spouse contributed to improvements on the property.
- The property gained value during the marriage.
You and your spouse made stipulations about the property in your pre- or postnuptial agreement.
If your spouse has a claim on the investment property, perhaps you two will be able to decide rationally what to do with it. If not, you may need professional advice as you weigh your options.
Jointly owned investment property can certainly remain jointly owned after a divorce. However, other options that are available will not require you to continue what may be uncomfortable or even painful interaction with your former spouse.
Letting it go... or not
The most obvious solution is to sell the property and allow the court to divide the profits along with your other marital assets. One drawback is that you are at the mercy of the real estate market, and the sale of the property may extend beyond settlement day.
Additionally, while selling the property may be the most straightforward resolution, you may not want to let it go. If it is not your intention or desire to be rid of the investment, you may be able to offer to buy your spouse's interest, with either cash or an adjustment in the property division settlement. Before offering this, you will need to know if you can afford the mortgage, maintenance, taxes and other expenses on your own.
If you are not working with a divorce attorney, you may wish to contact one for advice on dealing with the investment properties. A divorce attorney has prolific experience negotiating when emotions are high. Your lawyer will help you weigh the options and decide on the best course of action for a positive financial future after your divorce.