Dividing Real Estate in Divorce
While Texas is a community property state, and all property obtained during a marriage is presumed to belong to both spouses as community property, certain property such as real estate can present a challenge when it comes to the division of assets. When a married couple who owns real estate decides to divorce, they must determine if one party will retain the real estate or if they will sell and split the proceeds. If you and your spouse own property and intend to divorce, it is crucial that you engage a skilled attorney to determine which method of dividing real estate in divorce is in your best interest. The Dallas divorce attorneys at the McClure Law Group will work tirelessly to secure an appropriate share of marital assets on your behalf in a high-asset divorce.Separate Interests in Property
Initially, it must be determined if either spouse has a separate interest in any real estate. For example, if one person owned real estate prior to entering the marriage, or acquired real estate via an inheritance, that real estate may be separate property instead of community property. If either spouse claims that any real estate is separate property, he or she will need to trace back the ownership of the property to overcome the presumption that it is community property. While any separate property is retained by the spouse to whom it belongs, if joint funds were used to improve or maintain the property, any increase in the value of the property may become subject to a community property reimbursement claim.Property Appraisal
Regardless of whether you and your spouse wish to keep your real estate or you jointly agree to sell it, you will need an appraisal to determine the value of your property when you are dividing real estate in divorce. Generally, a real estate appraisal, which is based on the size and condition of the property and comparable property sales in the area, will provide an accurate third-party valuation. While tax assessments of real estate provide a valuation of the property, they often do not reflect the fair market value of the property as well. As a result, parties are usually discouraged from relying solely on a tax appraisal in determining the value. If you and your spouse cannot agree on a real estate appraiser, or if you obtain vastly different appraisals, consider asking the court to appoint a neutral appraiser to determine the value of your property.Selling Jointly Owned Real Estate
In deciding whether you wish to retain your property or receive a payout of half the value, there are several factors that must be weighed. You must consider what your financial situation will be after the divorce and whether you will be able to sustain the property and its encumbrances on your own, or whether it is more important to you to have the increased financial security that proceeds from a sale or a buyout from your spouse would provide. Furthermore, it is important to assess if the value of the property is likely to appreciate or depreciate in the future.
Selling any real estate that is community property and splitting the proceeds after any outstanding mortgages have been paid is the most straightforward way of fairly dividing the value of real estate. While selling property is relatively simple in terms of dividing its value, it does leave both parties in the position of needing to find a new residence.Retaining Jointly Owned Real Estate
If one spouse wishes to retain the real estate, dividing real estate in divorce becomes more complicated. A Special Warranty Deed, which states that one spouse is now the sole owner of the property, must be signed by the spouse relinquishing their interest in the property and filed with the appropriate clerk in the county where the property is located. If any outstanding mortgage exists on the property, it will need to be refinanced to remove the name of the spouse who no longer owns the property. Failing to refinance the mortgage could expose the non-owner spouse to liability for the remaining debt on the property, regardless of the fact that they no longer have any ownership interest in the property.
If the parties are unable to refinance the mortgage, the spouse transferring their interest in the property can be protected from liability via a Deed of Trust to Secure Assumption, which is signed by the spouse retaining the property and names the person transferring their interest in the property as a beneficiary. A Deed of Trust states that the spouse receiving the property assumes liability for any debt on the property, but it allows the transferring spouse to foreclose if the receiving spouse fails to make payments.Explore Your Options with an Experienced Divorce Lawyer in the Dallas Area
It can be difficult to determine how to divide real estate in a divorce, and the division process can be complicated. If you intend to file for divorce, and you have jointly owned real estate, you should consult a skilled divorce lawyer as soon as possible. The McClure Law Group has the knowledge and experience to assist you in determining how to disburse any real estate owned by your spouse and you, and we can ensure that your interests are thoroughly protected. Our attorneys are based in Dallas but have a Collin County office in Plano (by appointment) and represent individuals in Dallas, Fort Worth, Garland, Irving, Richardson, McKinney, Frisco, and Rockwall. We also represent people in other cities in Dallas, Collin, Grayson, Denton, Tarrant, and Rockwall Counties. Our law firm is familiar with all of the aspects of a high asset divorce, ranging from hidden assets to business valuation and property division. We can be reached at 214.692.8200 or via our online form to set up a consultation.