Many people have strong emotional attachments to real property. Such affinity often has a substantial price tag, especially in certain types of divorce actions.
This question may not be as significant for some younger people, as they may have little or no real property with equity or other economic value. But the landscape is often markedly different for couples over 50. For example, a divorcing couple might make decisions concerning a marital residence, revenue-producing property, and a vacation house or cabin. And, as the divorce rate in this age group has doubled in the past twenty years, even as the overall divorce rate has dipped slightly, the issue bears more attention.
Perhaps the most streamlined way to deal with this situation is to sell the house and divide the proceeds, but in many or most situations, such an idea is impractical, for one reason or another.
One option is an owelty lien for partition. In such an arrangement, no money exchanges hands at the time. Instead, the non-occupant owner obtains a lien for a share of the equity. Then, when and if the house is sold, the non-occupant owner receives a predetermined equity share. Other couples choose an offset agreement. For example, a couple may agree for Wife to remain in the house and retain the equity in exchange for her waiver of interest in a share of Husband's retirement plan.
Whatever the outcome, it is important for the occupant owner to keep the cost of ownership in mind (maintenance, taxes, and other expenses).
Most landlords will agree that profit margins for owners are very thin. While there is no rule of thumb, it would be unwise to assume that the property will always be occupied, the tenants will always pay rent on time, and the occupants will always care for the property. So, in the same way as determining the financial cost of a marital residence, these expenses should always be incorporated into the calculation.
The same logic applies to vacation properties, as they often have significant expenditures attached to them. However, these properties are often ordered to be sold in the divorce proceeding.
For prompt assistance in divorce property division matters, contact an experienced family law attorney in Naperville. After-hours and remote appointments are available.