A marriage is a legal transaction that involves creating a partnership where assets are shared. The dissolution of this partnership through a divorce requires the appropriation and distribution of those assets. Assets that may need dividing are financial holdings, retirement accounts, businesses, and real estate properties. The family home is included among these assets. In the absence of a prenuptial agreement, dividing family assets requires a thorough mediation process.
Ownership of Marital Assets
While many may assume that assets are divided up evenly based upon a dollar amount, that simply isn’t always the case. There is no way to fairly and evenly divide certain assets such as a house, rental properties, or vehicles. This is because it is rare for both partners to enter into a marriage with identical resources. Therefore, any wise divorce lawyer will try to divide assets as equitably as possible between both parties.
It should be noted that assets acquired during the marriage are seen in the eyes of the law as acquired by both parties. It would be simple to see a house as shared marital property, especially if both spouses are included in the mortgage. However, the shared marital property could also include property that technically only has one name from the partnership on paper.
Changes in Asset Value
An additional factor to consider is appreciation, both active and passive. Active appreciation is an addition to the value of assets through direct action, such as deposits and contributions towards investments. These are easy to track with proper documentation. Passive appreciation is the result of outside forces influencing an asset’s value, such as a market supply and demand, inflation and devaluation. Real estate lawyers are keenly aware of these factors and can be an asset in property valuation during divorce proceedings.
Redistributing assets is by no means an easy action to take. When it gets down to the matter, dividing up sentimentally valued property and financial holdings accumulated as a team is an exceptionally emotional event. This process can quickly become emotionally charged with everything else that is going on during a divorce. When personal items are thrown up for evaluation, it can leave feelings of bitterness should negotiations break down, and the goal switches from amicable separation to trying to get the best deal from the transaction. As such, a family home can quickly become a difficult asset to divide.
Separating couples can choose to handle this asset in different ways. First, the divorcees can choose to sell the home and divide the profit equally. This is the simplest way to divide the equity of the home. If one spouse does not wish to abandon the family home, he or she can refinance the mortgage to remove the name of the former spouse. This means that the home is no longer a shared asset as the old debt is replaced with a new loan. The spouse retaining the property may need to buy out the other person’s share of the equity. Finally, the asset may continue to be shared. This is a viable option for partners who choose a nesting method for child custody.
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