Divorce is an emotionally painful experience that can have an impact on anyone. It is not only an emotionally exhausting chapter of a person’s life, but also impactful on an individual’s personal assets, especially the high-valued ones such as investments, properties, and retirement funds. The Divorce Act and Family Law Act are the two important laws that control the asset and finance division process. They offer the separating couples a framework for dividing property and debts between them on the day of separation. Protecting your assets is important, especially while undergoing a divorce. This guide will help you understand the finest ways to protect your assets from the outcomes of a divorce. You will also get to know about different aspects of a divorce process that can make it a bit more complicated.

Understanding the Classification of Your Property

Family properties are divided into two types of classification given below:

1. Marital Property: These are the assets that you acquire during your marriage irrespective of the individual in the family who owns this property. Real estate properties that are jointly or solely bought are included in marital properties.
2. Exempt Property: These properties are brought by one spouse before the marriage or inherited during the marriage. These properties are not divided during a divorce.

It is important to know what is present in your marital property as it will help you safeguard your assets during such hard times.

Let’s take an example of Moroccan footballer Achraf Hakimi, who had to undergo a painful separation from his wife. During the divorce proceedings, Hakimi’s ex-wife demanded more than half of his assets. However, all of his assets were held in his mother’s name, which made it impossible for his ex-wife to get the amount of assets she demanded. Thus Mr Hakimi was able to safeguard his assets without any problem.

Valuation and Division

• Every marital property’s value is determined using a fair market value of the property.
• The lawyers calculate the value of all the assets included in the marital property.
• They subtract the debts that the spouses owe during this process.
• The spouses get the remaining net property that is divided between them.

Things You Need to Keep in Mind for Real Estate Investments

You need to carefully consider the value of your real estate investments during your divorce procedure. Here are the key points for real estate investments:

● Valuation:

It is important to know the value of your real estate. You can seek help from licensed appraisers, who will help you understand the real value of your properties.

● Equity:

Spouses should establish the amount of the ownership stake they have in the property. This includes contributions made during down payments, mortgage payments they made during the marriage, and any renovations they did to the property.

● Debt:

Mortgages and other liabilities that exist and are associated with a property are considered debts that are supposed to be divided as a part of the overall finances. A good family lawyer will help you understand this aspect well.

● Tax Implications:

If you are selling a property during the divorce proceedings, you will have to pay capital gains taxes. You should consult a tax expert to understand the complications of doing so.

Division of Real Estate Investment

Here are several things you can do to divide your real estate investments during your divorce procedure in the following:

1. Sell off the property to get immediate cash that will be divided between you and your partner during the separation. However, you need to keep the conditions of the market, selling costs, capital gains taxes in mind before undergoing this process.
2. Another way to divide the estate is that a spouse can buy out the property share of the other spouse. They can do so by cash, loan, or property settlements they receive in the future.
3. Joint ownership allows the spouses to continue owning the property together after the separation. However, both of them will have to follow a clear agreement that lays out each others’ responsibilities with respect to the property, such as rental income and future disposition. This is however, a complex option as it requires ongoing communication between the owners.
4. Ownership Transfer is another option in which one spouse is awarded the ownership of the entire property in exchange for other marital assets. It is the best solution if you want to retain the primary residence for your children.

Factors that Affect Property Division

Here are some important factors that affect the division of property during divorce proceedings, such as:

● Duration of the Marriage:

If the duration of your marriage is long enough, it will help you equally divide the assets with your partner during the divorce without much complications.

● Contributions Made By Each Spouse:

The contributions made by you and your partner to acquire and maintain the property during the marriage is also subjected to consideration.

● Spousal Support:

If you or your spouse are dependent on the property’s rental income, or needs the primary residence to take care of your children, it can have a certain impact on the property division.

● Arrangements for Child Custody:

Having a suitable house should be a priority for you during the proceedings when children are involved.

Why Do You Need Legal Aid During Property Division During a Divorce?

Property division during a divorce proceeding is a complicated process that requires to be done with expert support. For that, you need the best lawyers specializing in family law in the USA.

Here’s how their assistance can be helpful to you:

● Understanding Your Rights:

These lawyers will help you understand your legal rights with respect to the property division.

● Documentation:

Lawyers can help you in the whole documentation process regarding the value of the property, mortgage details, and other financial records.

● Negotiation:

These legal experts will give you suitable advice to negotiate with your spouse to reach a favourable mutual settlement. They can also act as a mediator, which is also an effective option to avoid any clash during the negotiation process.

● Litigation:

A lawyer can also represent you in a litigation case if you and your spouse don’t reach an out-of-court settlement.

● Prenuptial Agreements:

Having a prenuptial agreement can help you and your partner understand the ownership and division of property before getting married.

Financial Aspects You Need To Consider During Divorce Proceedings

Here are some financial aspects that you need to keep in mind during a divorce proceeding:

● Will Updation:

You should keep updating your will every 6 months, or during major life events, such as divorce or separation. Keeping an up-to-date will ensures your wishes are honoured as per your relationship or marital status.

● Make a List of Assets and Liabilities:

This is the most important part of the financial planning process during a divorce. You need to create a detailed list of assets,  debts, sources of income, and expenses. This will help you negotiate a fair settlement during a divorce proceeding.

● Child and Spousal Support:

You should understand the important factors influential in calculating the amount of alimony or child support each individual will get during a divorce. Since this is a complex area, you need to consult a legal expert that will help you reach a fair and justified settlement.

Dos and Don’ts While Planning Your Finances

Here are some of the major dos and don’ts that you need to consider while planning your finances during  a divorce procedure:

1. Avoid ignoring the expenses that occurs during the procedure. It will prevent you from plan your finances in an efficient manner.
2. Seek mediation as it will help you and your spouse reach an efficient agreement related to things like child custody and support, apart from several other factors. This will save you a lot of time and money.

Final Verdict

Divorce or separation is a process that is emotionally painful and takes a lot of time to process. It typically involves a lot of aspects that can waste a lot of time and resources. In such situations, it is important to seek legal guidance from a trusted divorce lawyer who will help you navigate this complicated procedure. Lawyers specializing in divorce and family planning have expertise and knowledge in such procedures. They can help you with all the steps and avoid further complications.

Furthermore, you should plan the division of property and finances between your partner, which will help you ensure a smooth outcome during the separation. This process will not be easy. However, a consultation from a lawyer is important during such processes. These people are experts in handling complicated cases inside and outside the court. They can act as a mediator to ensure a fair settlement for you and your former partner. They will also represent you for litigation in the court if deemed necessary. These lawyers are also well-versed in court procedures, thus providing you with effective guidance. This will help you navigate the property and finance division process while you are going through a divorce. Thus, you will be able to live peacefully and avoid any further complications.

The post Divorce, Property Rights, and Real Estate Investments: Legal Guidance appeared first on The Total Entrepreneurs.

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