When a couple enters a marriage, it is not uncommon to have shared real estate property such as a family home. Any property owner in San Diego knows how valuable their real estate is. Whether you are a real estate investor or a single homeowner, having real estate investments are an important part of one’s financial plan. However, in cases in which a marriage ends, the division of marital property can become complex if a number of high-value real estate assets are involved. Divorce is oftentimes not an easy process, both emotionally and legally, and protecting your rights to the real estate you own can be an important element for many people when separating from your spouse.
Planning Ahead Before Marriage
While no couple enters a marriage anticipating a divorce, it can be beneficial to have a plan in place before becoming legally married, especially for those who are real estate investors, business owners, or high-asset individuals. Prenuptial agreements are an option for couples that have pre-marital assets, such as real estate investments, that they want to protect in the future. A prenuptial or premarital agreement is a legal contract which defines each spouse’s individual property and outlines the rights and obligations to each property in the separation of assets in a divorce. When creating a premarital agreement, it is best to work with a skilled divorce and family law attorney to ensure your rights are protected and that the agreement is valid and enforceable by the California courts.
What Is Considered Community Property and Separate Property in a Divorce?
When entering a divorce in California, it is important to understand the differences between community property and separate property. Any property acquired during marriage and held in joint names between spouses is presumed to be community property or marital property. Community property also includes property that is titled in one spouse’s name but was acquired during the marriage. The San Diego divorce attorneys at Wilkinson & Finkbeiner explain the importance of the title presumption under California divorce and family law because even though property has been acquired in joint names during marriage, but is separate property in character, it is still considered community property.
On the other hand, separate property includes any property acquired before marriage or after the separation of spouses. Any property that was previously owned before entering a marriage but is being brought into a marriage is considered separate property or pre-marital property. Distinguishing between the two types of property are important for the division of marital property when filing for divorce or separation.
Getting an Accurate Valuation of Property
In divorce proceedings, both community property and separate property must be valued in order to settle the division of marital assets. For real estate owners in San Diego, it is important to work with an experienced and trusted appraiser or San Diego Realtor to help assess the valuation of your real estate. The valuation of community property can be done in court by either party offering expert testimony on the value of each asset or by providing the court with a written document listing the value of each asset. Working with an experienced real estate team can help you get the most accurate appraisal of real estate property by including considerations of taxes on investments. Getting an accurate valuation of the property you own can ensure property is divided fairly and can help avoid losing rights to property you deserve.
Proving Your Real Estate Is a Pre-Marital Asset
An important step to protecting your real estate assets in a divorce is listing all properties you acquired before marriage and having the legal documents as evidence of property ownership. Since California is a community property state and all assets in a marriage are considered marital assets, proving your real estate is an asset acquired before the marriage can protect your rights to the property. It is also important to have paperwork proving any loans associated with the property were paid off before entering the marriage, otherwise the courts may consider the asset to only be partially pre-marital.
Proving your real estate is individual and separate property from your spouse can also be done by showing evidence of:
- A prenuptial agreement signed by both parties
- Documentation of the transfer of property as an inheritance
- Real estate property as a gift to the individual spouse, not both parties
Benefits of a Land Trust
An option for protecting your real estate assets in a divorce is to set up a land trust. Commonly used by real estate investors and large estate owners, a land trust is a legal entity that takes ownership and authority over a piece of property at the request of the property owner. With real estate assets set up under a land trust, the property is controlled by a trustee and is not considered community property in the case of a divorce or separation. Property under a land trust is legally owned and exists under the name of the trust, which allows for anonymity with property ownership. This protects an individual property owner’s real estate as it is separate property and not an asset to be divided between spouses.