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 is an important part of one’s financial plan. When a marriage ends, dividing marital property becomes complex, especially when it involves multiple high-value real estate assets. 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 that defines each spouse’s individual property and outlines the rights and obligations to each property in the separation of assets in a divorce. Work with a skilled divorce and family law attorney to create a premarital agreement that protects your rights and ensures its validity and enforceability in California courts.
Community Property and Separate Property
Understanding the distinction between community property and separate property is crucial when divorcing in California. Property acquired during the marriage and held in both spouses’ names is presumed to be community property. Even property titled in one spouse’s name but obtained during the marriage qualifies as community property. The San Diego divorce attorneys at Wilkinson & Finkbeiner stress the significance of the title presumption under California divorce and family law. For example, property acquired jointly during the marriage but classified as separate property is still treated as community property.
In contrast, separate property includes assets acquired before marriage or after the spouses separate. Property owned before the marriage and brought into it is classified as separate or pre-marital property. Clearly distinguishing between these two property types is essential for dividing marital assets during a divorce or separation.
Getting an Accurate Valuation of Property
Divorce proceedings require valuing both community property and separate property to divide marital assets fairly. 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.
Either party can present expert testimony or provide a written document listing the value of each asset to determine the valuation of community property in court. Partnering with an experienced real estate team ensures you receive the most accurate real estate appraisal, factoring in tax implications on investments. Accurately valuing your property helps ensure a fair division and protects your rights to the 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. In California, a community property state where all assets in a marriage are considered marital, proving that you acquired your real estate before the marriage protects your property rights. Showing paperwork that confirms any loans tied to the property were paid off before the marriage further strengthens your claim. Without this documentation, courts may view the asset as only partially pre-marital.
You can prove your real estate is your individual and separate property from your spouse by providing evidence of:
- A prenuptial agreement signed by both parties
- Documentation of the transfer of property as an inheritance
- Real estate property is 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. Placing real estate assets in a land trust gives the trustee control over the property, ensuring it does not qualify as community property during a divorce or separation. The trust legally owns the property under its name, ensuring anonymity for the owner. This arrangement protects the owner’s real estate by designating it as separate property, shielding it from division between spouses.