Important Considerations When Dividing Real Estate Property for Divorce

 Posted on May 12,2021 in Complex Property Litigation

Getting a divorce in Texas requires dividing marital property between spouses in a way that the court determines is “just and right.” Unfortunately, spouses often have very different ideas about what is just and right, and this can lead to difficult, protracted settlement negotiations or the need for complex litigation. Properties with higher values, including homes and other real estate properties, have a greater impact on the division of assets, and you should be sure to understand all of the implications before deciding the outcome that you want to pursue.

Real Estate Property Details in a Texas Divorce

In either a negotiated or litigated property division agreement, all of the following details can have a significant impact on the outcome:

• Property value - In order to fairly divide real estate property, you will need to understand what it is worth. When it comes to both residential and commercial properties, the value is heavily influenced by the current real estate market, in addition to factors like the condition and features of the property. Obtaining valuations through an appraisal and comparative market analysis can help you prepare to sell the property if necessary, or prepare to compensate your spouse with assets of roughly equal value if you want to keep the property.
• Debt and other financial obligations - Debt belonging to the marital estate must also be divided in a divorce. Your real estate properties may still have outstanding mortgages at the time of your divorce, and a spouse who is granted a property in the divorce may also be ordered to take responsibility for the mortgage. In this case, it is important to include a provision in the agreement requiring a refinance of the property to protect the other spouse from liability to creditors.
• Income potential - If your real estate property earns a regular income, perhaps as a full-time or short-term rental, you will likely need to value it as a business, rather than simply a property for personal use. You should be prepared with documentation of the property’s earnings and expenses to help you determine an accurate value. If you want to keep an income property in the divorce, you may need to reimburse your spouse for contributions they made to the property during the marriage.
• Capital gains taxes - If you are pursuing a resolution that involves selling a real estate property, you should be aware that if the property has increased in value under your ownership, you will likely owe capital gains taxes upon selling it. This can decrease the overall value of the marital estate and harm both spouses in the division of property.

Contact an Austin, TX Property Division Attorney

Dividing valuable real estate properties in a divorce is often complicated. Working with an experienced Austin high asset divorce lawyer helps you ensure that you have considered all of the details. At Powers Kerr & Rashidi, PLLC, we know how to handle property litigation during the divorce process, and we will work to protect your interests. Contact us today at 512-610-6199 to learn how we can assist with your case.

Source:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.7.htm