Multiple real estate properties can add layers of complexity to an already nuanced divorce. In the state of New York, couples facing such a situation need to carefully consider various factors.
New York follows the principle of equitable distribution, which does not necessarily mean a 50/50 split. Instead, the court considers issues, including the duration of the marriage, each spouse’s financial situation and contributions to the acquisition of assets.
Property valuation
Determining the value of each property is an important first step. Couples should hire professional appraisers to assess the current market value of all real estate holdings. This valuation serves as the foundation for equitable distribution.
Categorizations
Distinguishing between separate and marital properties is important. Separate properties, generally owned before the marriage, may be exempt from division along with gifts or inheritances. Meanwhile, marital properties acquired during the marriage are subject to distribution. Couples must identify and categorize each property accurately.
Tax implications
Divorcing couples must be aware of the potential tax consequences associated with the division of real estate. Transferring ownership of properties may trigger capital gains taxes or other liabilities.
Maintenance and upkeep costs
Owning multiple properties comes with ongoing expenses. Divorcing couples need to discuss how to manage these costs until they reach a final settlement. Clear agreements on responsibilities for maintenance, property taxes and mortgage payments avoid financial strain on both parties.
Future planning
Once the division is final, both parties need a clear plan for their residences and respective real estate holdings. This includes decisions about whether to sell, rent or continue living in a property. For example, in New York state, the median value of an owner-occupied house is $340,600. One spouse could continue living in the primary residence and give up some secondary properties.
Divorcing couples in New York with multiple real estate properties face a unique set of challenges. Fortunately, couples can navigate the complexities of real estate division during a divorce in a more informed and strategic manner.