When going through a divorce you’re losing more than you could imagine. Here are three tips for protecting your real estate assets when going through a divorce in Indiana.
No one starts a marriage planning on going through a divorce. It’s messy, unpleasant, and hard on everyone involved. However, as much as we don’t want it to happen, divorce does happen and can get complex when it involves a home and real estate assets. Hopefully, the goal is to work together for the ideal and most amicable outcome.
Even with this as the goal, it’s wise to prepare for less than ideal if you want to protect your assets. To help you prepare for the worst, here are 3 tips for protecting your real estate assets when going through a divorce in Indiana, especially when it ends in the sale of the home.
1. Implement the Necessary First Steps
Yes, you will have big emotions during a divorce, but it’s important to have a clear head especially when dealing with dividing up assets like real estate. Take note of the following steps so you put your best foot forward.
Get Prepared Before Filing
Remember, during a divorce, everything is subject to division when settling. Starting now, take steps to gather evidence to support your claims in court so you can protect as much as possible.
Take Inventory of Non-Marital Assets
If applicable, gather a thorough list of all property you had and acquired before you were married. This list alone isn’t enough. You’ll have to also find and provide evidence that supports your claims. You can find this evidence on documents like your real estate records.
Get an Accurate Valuation of Your Real Estate Assets
“Most people tend to forget the implication of tax on investment, such as deferred tax payment on retirement accounts. An early withdrawal could also come with a penalty. Put such factors into consideration when appraising the value of property and investments.”
Choose Your Battles Wisely
We’ve all heard the statement, “Choose your battles wisely.” This applies to divorce, too. Remember, you don’t need to fight about everything because not everything is worth fighting for. Each fight you pick during a divorce adds to your attorney fees. So it’s imperative to weigh the value of the asset you’re considering fighting for against the attorney cost before making a petition.
Consider Getting a Mediator If Possible
If at all possible, consider getting a mediator. If mediation is successful, it can drastically cut down on the cost of fees for attorneys. Many mediators can also assist with facilitating the divorce agreement. Divorces are expensive, and outcomes aren’t always what you desire so working together may be your best option.
2. Implement These Tactics
In addition to the list of first steps above, here are three tactics that are necessary when you’re trying to protect your real estate assets in an Indiana divorce.
Use Equity to Your Advantage
See this quote from a professional, “You can protect the real estate assets you have control over and have purchased individually by maximizing on its equity. Equity often determines the real value of a property. By subtracting any loans secured with the property from the property’s market value, divorce attorneys are able to determine the amount that should be split between the divorcing parties. Maintaining negative equity is the best bet at protecting your assets.”
Prove Assets Are Premarital
All assets in a marriage are to be considered joint if you are not able to prove that they are pre-marital assets. “For real estate acquired before the marriage, you need to prove that any loans associated with the asset were cleared before you got into the marriage.” If you don’t do this, the court could assume that “the asset has only partial non-marital value.”
Consider The Option of Setting up a Land Trust
Did you know that you can place all real estate assets you had before you were married into a land trust? A land trust will keep your assets protected from the unfortunate event of losing your property during divorce to creditors and litigators.
Here’s how it works . . . “A land trust offers protection by maintaining your privacy with regards to ownership of real estate. The land trust will be the legal owner of the estate, and your name will not appear in any public records that identify property ownership. Only the trust name will exist.”
3. The Process of Selling Real Estate Assets in a Divorce
Many times both individuals, or parties, in a divorce come to an agreement about what to do with the property. Often times, they’ll sell their assets and then split the proceeds. If this is the case, take the following steps to ensure your share of the real estate assets are protected.
Set an Asking Price
Do not set the price based on what you “think” your property is worth or what you “want to get” for your property. You have to price your home based on what the market value is. In order to do this, it’s highly recommended that you work with a local real estate professional who knows your specific market well. You can always contact us by calling 812.768.3108. We’ll be happy to walk you through the process.
Prepare the Home for Showings
It’s been said that one of the most difficult parts of selling a home is getting it ready for listing. Most homes have at least minor repairs like panting, replacing all light bulbs, and getting the house professionally cleaned. All of these items are things that you’ll both need to agree on who is in charge of what.
Reviewing Offers
When the offers from hopeful buyers begin to pile in, you will need to work together to review them and choose the best one. Typically, both parties in a divorce are ready to get the process over with and may accept a less than desirable offer. This is a good time to lean on your agent’s expertise when reviewing offers.
Dividing the Proceeds
The final step in the selling process will be divvying up the proceeds of the sale. “In general, that shouldn’t be too complex – the escrow company can distribute the money, after paying off all the obligations on the house and making whatever other payments you’ve agreed to.”
Usually, the only difficulty that arises here is when “one spouse has been making post-separation mortgage payments, that spouse has probably been reducing the principle amount and increasing the equity, which may increase the amount to be divided between the spouses after the closing costs and obligations have been paid. The distribution should be adjusted to account for the paying spouse’s contribution.”
An Important Aspect of Protecting Real Estate Assets
If you choose to sell your property, you’ll likely come out far ahead by working with an experienced local real estate investor like us. We have extensive knowledge of the market in your area and will fight to get you the best offer possible. We also offer solutions to help you make selling your home as simple as possible. No negotiating offers, no repairs, and no hassles. If your goal is to protect your Indiana real estate assets when going through a divorce, be sure to contact us today at 812.768.3108.