If both you and your spouse purchase property during your marriage, it is regarded as marital property irrespective of how the property is registered. If divorce ensues, you and your spouse have numerous alternatives for sharing your rental property. Moreover, our lawyers at Cheap Uncontested Divorces can help you in your settlement during an uncontested divorce in Georgia.
The divorce rate in Georgia State alone was 1.9 in 2020. According to the findings, 1.9 persons out of every 1,000 people in the state end up filing a divorce. Personal differences, loss of trust, violence, financial concerns, and social pressure are some of the underlying causes of divorce.
Asset division during a divorce is rarely simple, but it can become especially problematic if you jointly hold a revenue asset, such as a business or rental property. Regarding asset division, rental properties are unusual, and you undoubtedly think they will be divided similarly to private residential property or more like a company. This article will go through the fundamentals of how you can divide rental properties during a divorce in Georgia.
Divorce in Georgia and Rental Property:
Appraisal of the Rental Properties:
It is strongly advised that every rental property your spouse owns should be professionally appraised. While it is legally acceptable to decide on an arbitrary value, there are several risks. It is very easy for one spouse to purposefully misrepresent (undervalue) the property in order to mislead the other spouse, who understands very little about real estate, into believing it is worth significantly less.
Let’s assume your ex-spouse informs you the rental house is worth $50,000. You take them at their word and let them keep it while you withdraw $50,000 from their retirement fund as your fair share. Following the separation, they flip the rental and gain $100,000, having purposely concealed the value from you. You’ll be out of luck at that point, and out $25,000 that should have been yours. Don’t put yourself in jeopardy. Obtain an appraisal.
Another consideration is to handle rental income during the process of divorce. It’s fantastic if you and your partner mutually agree on achieving this. For example, while the divorce is finalized, you could just divide the monthly income equally. Your attorney can clarify the details in a temporary agreement for your protection.
You can also elect to set aside the funds in the meantime. It is typical for rental income to be paid into a trust or property management account and not accessed by either party until the divorce is finalized. The only withdrawals from the account are for property expenses such as upkeep, taxes, and insurance — and withdrawals are communicated to both parties.
Handle the Property Together:
Suppose both the husband and wife wish to keep running the rental property and feel that they can operate together after the divorce. In that case, one other option is to create a legal contract to operate the property and divide the profits. We suggest that you both engage with your divorce lawyers to iron out the contents of a property management arrangement. A court cannot compel parties to keep the property in joint ownership.
Rental Property Issues:
While you decide how to proceed just after divorce, you may also need to make decisions about what to do if matters such as property tax or insurance obligations arise while the divorce is pending. Should one or both spouses’ foot the bill? Also, who covers emergency property repairs during the divorce?
Addressing this and many other decisions regarding your rental property could be challenging if the husband and wife cannot reach an agreement on other divorce-related topics. Having a divorce lawyer to counsel you, on the other hand, may help relieve some of the stress while you go through the divorce process.
As with other parts of the property division, you have the option of “trading” any other marital assets in a trade for the rental property you would like to maintain. Assume you have a single rental property that you both can manage. You want to keep this property and not manage with your ex. So, you can agree and let your ex keep the marital house in exchange for the rental property.
Contact Cheap Uncontested Divorces to make an appointment for experienced assistance on how to handle your rental properties during a divorce in Georgia. We help clients with all aspects of divorce, including complex asset splits.