When spouses divorce, concerns arise over the division of assets. Maryland is not a community property state, meaning the court will rule based on the principle of equitable distribution. “Equitable” might be open to interpretation, and those with greater assets than the other spouse may attempt to protect their investment. Persons with significant real estate holdings might seek to get the best settlement arrangement possible.
Real estate assets and divorce divisions
A 50-50 split on a primary home or vacation property might involve the court ordering a property up for sale and the proceeds divided. One spouse may wish to keep the home for any number of reasons. Some may feel the value could increase, and others might have intentions of collecting future rental income. After a court-ordered sale, those plans would dissolve.
A spouse could make an offer to buy the other partner’s interest in the property. Such an offer would occur during the divorce settlement negotiations. If the spouse receives a fair offer, the deal may prove acceptable. Successful settlement negotiations could carry over to other assets, and a judge’s decisions might prove unnecessary.
More complex ways to deal with real estate divisions
Moving real estate assets into an LLC could establish the property is a nonmarital holding. However, doing so requires moving the property to the LLC before marrying. After marriage, perhaps a postnuptial agreement might protect the property if the marriage ends in divorce. Of course, a prenuptial agreement could be an option before the marriage takes place.
Making oneself a beneficiary of a domestic asset trust might be an option. Such a strategy could be worth pursuing, and those entering into a high-asset divorce might wish to review all available options.