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Owning real estate jointly is a common decision by married couples. You and your spouse may have purchased a home together where you raised your family. You may have bought a cabin or summer house to enjoy your vacations together.
It’s also possible that you may have purchased multiple pieces of real estate to treat as investment properties. Perhaps you want to fix them up and resell them, or maybe your family generates revenue by renting out those homes.
Whether you own a house together or own multiple properties that produce revenue, you will probably worry about what happens to your real estate when you divorce.
You and your spouse will probably need to divide your real property
Whether you own a starter home or have a portfolio of rental properties, the chances are good that you and your spouse will need to divide those assets. Colorado, like most states, applies an equitable distribution standard to your marital property.
Anything you bought during your marriage or with money earned while married is a marital asset in which each spouse has a partial ownership interest. Unless you have a marital agreement designating those assets as separate property, both of you will be able to claim a portion of the equity in your real estate holdings. Only property owned prior to marriage, designated as separate property in a marital agreement or inherited will usually be exempt from division.
How do you divide real property?
If you share a house, maybe one spouse wants to continue living there after the divorce. They may need to refinance the property so that they can offer their ex an appropriate amount of equity.
If the couple owns multiple properties, the best approach might involve each spouse keeping certain properties. If those properties represent a business investment, one spouse may want to continue operating the business while the other asks for a share of the equity from all of those investment properties. It might even be a good idea for you to sell the real estate and split the proceeds.
What matters most is that you have a realistic idea of what each piece of property is worth and that you try to find a fair and reasonable way to divide the property. Identifying your biggest assets and placing an accurate value on them is an important first step for those facing complex property division issues in an upcoming divorce.