Do you have questions about divorce and real estate? Are you asking yourself if you can afford to remain in your property after your divorce is finalized? Have you considered the pros and cons of selling? Gabriela Sandoval is a Certified Real Estate Divorce Specialist (CREDS). She can talk to you about your real estate options during and after your divorce. Always consult directly with your family law attorney or collaborative team and tax professional to discuss the legal and financial implications of your unique situation.
Divorce and Real Estate
For most married couples, the family or marital residence may be the single most valuable possession in the marital estate. Aside from the economic value of the marital home, the residence often carries with it deep psychological roots and this is amplified when there are children involved. I recognize the attachment that a spouse and children may have to the home. In dividing property, your state court may consider the desirability of awarding the family home or the right to live there for a reasonable period to the spouse with whom any children reside a majority of the time. It is important to speak with your family law attorney or collaborative team and financial professional about asset division.
Making the right decision will require considering many factors that will affect you and your loved ones. Transitions are not always easy, but they can provide a much better quality of life. In any divorce or separation where the spouses own their own home, there will be a need to settle upon an appropriate disposition of the residential property. In general, there are three options:
1. Transfer by one spouse to the other of his or her interest in the home;
2. An immediate sale of the home, with a division of the proceeds between the spouses; or
3. Keeping the property for the time being and division of the proceeds at some point it the future.
It’s important to note that each option has its own tax implications based upon your unique circumstances. Your attorney and accountant should be consulted to determine the best course.
In general, marital property is divided “equitably.” There may be a multi-step process: Determining if the property is marital or separate; Valuation of the property; and Equitable distribution of the property.
*Disclaimer: The information found on this website does not constitute legal advice, only general information. For legal advice, consult your family law attorney.*
Divorce and Real Estate. Separate or Marital?
For Connecticut residents:
For married couples divorcing in Connecticut, all property is considered marital. Connecticut is an equitable “all property” state which means the court has the authority to award real property (the house) to either spouse even if only one party is on the title, if it was acquired before or during the marriage and/or if it was a gift or inheritance. However, If there is an enforceable prenuptial agreement, that may have specific terms as to separate property which may belong to only one spouse. Talk to your family law attorney about your unique circumstances.
According to Connecticut statute: “At the time of entering a decree annulling or dissolving a marriage or for legal separation pursuant to a complaint under section 46b-45, the Superior Court may assign to either spouse all or any part of the estate of the other spouse. The court
may pass title to real property to either party or to a third person or may order the sale of such real property, without any act by either spouse, when in the judgment of the court it is the proper mode to carry the decree into effect.” Conn. Gen. Stat. § 46b-81(a) (2019).
To learn about property distribution including the house or the value of the house, contact your Connecticut family law attorney and your CPA or Certified Divorce Financial Analyst (CDFA).
For Colorado residents:
Colorado statute defines marital property as “all property acquired by either spouse subsequent to the marriage.” C.R.S. § 14-10-113(2). Also, “all property acquired by either spouse subsequent to the marriage and prior to a decree of legal separation is presumed to be marital property, regardless of whether title is held individually or by the spouses in some form of co-ownership…C.R.S. § 14-10-113(3).
In the case where one of the spouses acquired the property before the marriage or by gift, bequest, devise, or descent, or in exchange for property acquired, the property is marital property but only to the extent that its present value exceeds its value at the time of the marriage or at the time of acquisition if acquired during the marriage. C.R.S. § 14-10-113(4).
Note that, there is a presumption that a gift by a third-party donor during the marriage, which increases the value of a jointly titled asset of the spouses, is a gift to the marriage. Also, when a spouse places separate property in joint ownership during the marriage, a presumption arises that the donor spouse intended a gift to the marriage. This presumption can be defeated only by clear and convincing evidence to the contrary.
In Colorado, there are four exceptions to the broad inclusion of marital property:
- Property acquired by gift, bequest, devise, or descent;
- Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent;
- Property acquired by a spouse after a decree of legal separation; and
- Property excluded by a valid agreement of the parties.
The court cannot divide separate property, only marital property. To make a claim of separate ownership successfully, a spouse must trace the property to its separate origins.
To qualify as a “gift”, a transfer of property must involve a simultaneous intention to make a gift, delivery of the gift, and acceptance of the gift. The determination hinges on the intent and acts of the donor and recipient, which are questions of fact for the district court to resolve.
Valuation of Property:
Property must be valued as of the date of the decree or hearing on the disposition of the property. An exception is if one spouse dissolves marital assets in contemplation of divorce – those assets must be valued as of the last date they existed as marital property.
The parties must present the court with sufficient data to make a reasonable valuation. The fair market value can be determined by an appraiser. Another method of valuation, a comparative market analysis (CMA), is done by a real estate agent. It should provide a range of value that the home should be listed at in the open market at a date in the future. A CMA may be less expensive, however, the CMA may not provide the accuracy and quantitative analysis of an appraisal and does have a slightly different purpose. Tax assessments may provide an indication of value but are generally not as accurate as a CMA or an appraisal and often are outdated.
Contact Me
If you are going through a divorce and determine it will be best to sell the marital property, I can help you through the process. A new beginning can be frightening but I can assist in finding you the right place to call your new home. When you have questions about divorce and real estate, contact Gabriela Sandoval.
If you need referrals to Connecticut or Colorado family law attorneys, CPAs or Collaboratively trained divorce attorneys, I’m happy to refer you. If you need a Connecticut Guardian ad Litem (GAL) or Attorney for the Minor Child (AMC), I am a GAL/AMC and can help you myself – please visit me, Attorney Gabriela N. Sandoval, at www.thelawguardian.com.
Source information on this page is taken from The Practitioner’s Guide to Colorado Domestic Relations Law and from the Equitable Distribution of Marital Property in Connecticut 2020 guide.