Let’s say that you and your spouse have decided to divorce. One of the significant steps that you will have to take is dividing your property between the two of you. This process can be simple or complex, depending on each individual case. But there is one type of property that can raise complications much more frequently than other assets: Real estate.
Dividing real estate in a divorce, particularly if one property is the marital home, is rarely easy. California’s laws regarding division of real estate can be bewildering. California is a community property state, meaning that property in a divorce is considered equally owned by both spouses and must be divided equally. That means that there are several important tips to remember if you are thinking about how to share property in a divorce.
1. Get an appraisal
Visit a certified appraiser for an accurate assessment of the real estate value. Don’t rely on past appraisals: Get a current evaluation from a professional.
2. Calculate your share
The theoretical share due to each spouse will be calculated by 50 percent of the equity in the property and 50 percent of the outstanding mortgage balance.
3. Keep or sell?
Have an honest discussion with your spouse about whether to keep your real estate properties or sell them. If you do decide to sell, pay off any outstanding mortgage and divide the proceeds equally between both parties.
4. Balance it out
Should you decide that one spouse will keep the property, balance any inequalities regarding the overall division of assets. The other spouse should receive an equal balance of assets or debt to maintain a fair split.
5. The gift exception
There are certain exceptions to the community property rule. Gifts, for example, are often considered the sole property of one spouse. So if one partner was given a piece of real estate as a gift, it might be subject to different laws.
Remember, every divorce is different, and many complex legal factors will apply to each case. Couples who are wondering how to divide California real estate can frequently come to an arrangement that is suitable for both parties.