Gray divorce: A growing phenomenon for those age 50-plus

By Andrew Zashin*

While the overall divorce rate has dropped in recent years, the Pew Research Center found the divorce rate among adults age 50 and older in the United States has doubled since 1995. Reflecting societal changes and shifts in personal priorities that challenge the conventional notion of “till death do us part,” this phenomenon, coined the “gray divorce,” poses unique opportunities and obstacles for individuals seeking a fresh start in their older years.

Various factors contribute to this trend, including evolving attitudes toward divorce, longer life expectancies and shifting gender roles. As divorce has become more socially acceptable, and with people now leading active lives well into their older years, many individuals are reevaluating their relationships and reconsidering whether their partners align with their long-term goals, particularly if the other spouse has had an affair, is emotionally or physically abusive, or struggles with addiction.

Further, with more women than ever before attaining financial independence through participation in the workforce, and with individuals increasingly prioritizing personal fulfillment and happiness, many older individuals are electing not to stay in unhappy marriages “for the sake of the children,” particularly if their children have emancipated. Older couples also sometimes find that as they become empty nesters and retire, they have less in common than they once did. Additionally, as more and more individuals are living alone or in a retirement facility as they age, there is a reduced societal expectation that one spouse will serve as the other’s caregiver indefinitely.

Some notable examples of gray divorcées include Clint Eastwood (age 84 at the time of the divorce) and Dina Ruiz, Rupert Murdoch (age 82 at the time of the divorce) and Wendi Deng, Bill and Melinda Gates, Jeff Bezos and MacKenzie Scott, and Arnold Schwarzenegger and Maria Shriver.

Gray divorce couples face some unique challenges as they look to end their marriage. While custody battles are less common because children of gray divorce couples are often older or emancipated, unique financial considerations often rise to the forefront in gray divorce cases. Many older couples have accumulated assets that require special attention when dividing the couple’s property, particularly if the couple desires to preserve some of their wealth for their children or for future generations.

Similarly, while all divorcing couples should update their estate planning following, or in connection with, a divorce, this is an especially important task for gray divorcées. Health insurance can pose a significant concern, especially if one spouse relies on the other’s insurance and is not yet eligible for Medicare. Dividing retirement benefits can also be complicated, particularly if a defined benefit or pension plan is already in payout status. Social security benefits, tied to marriage length and status, are also an important consideration for older couples looking to separate.

Despite the potential challenges, a gray divorce can mark both an end and a fresh start. As the landscape of relationships continues to evolve, gray divorce can serve as a path toward renewed happiness and personal growth. For those contemplating divorce in their later years, I encourage you to consult with a knowledgeable family law attorney to explore potential issues and to enable you to make an informed decision.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-20T15:13:04-05:00November 20th, 2023|Divorce|

Charitable contributions in divorce: not just for rich and famous

By Andrew Zashin*

Navigating the divorce process is often both emotionally and financially challenging. As part of the process, couples must divide their assets. While this often involves extensive legal and financial negotiations, and potentially even court involvement, there exists one option in structuring a property division that can yield positive results that benefit both the parties and their communities: charitable contributions.

The media often portrays charitable contributions made in connection with a divorce as an avenue only available to the rich and famous. I previously discussed how, as part of their 2021 divorce settlement, Bill and Melinda Gates pledged to continue working together on their philanthropic foundation, the Bill and Melinda Gates Foundation, which focuses on global health and development. The Gateses, who have donated more than $59.1 billion to their foundation since its creation, stated that they would continue to work together “to shape and approve foundation strategies, advocate for the foundation’s issues, and set the organization’s overall direction.”

Similarly, following her divorce from Amazon founder Jeff Bezos in 2019, MacKenzie Scott has made headlines for her philanthropic giving, donating more than $14 billion to over 1,600 charities and organizations. She works with a team of advisers to identify and vet community-focused organizations that work to reduce disparities in health, education, economic outcomes, and other critical issues.

But incorporating charitable contributions into a divorce settlement is not just for the rich and famous. In fact, charitable giving serves as a viable option for divorcing couples of all income levels. As charitable giving can take many forms, including donations of money or assets, one or both parties may choose to donate a portion of their property division to a charitable organization as part of their divorce settlement. This provides the parties with a way to support causes that are important to them, while potentially receiving tax benefits that can help offset some of the financial costs of the divorce.

There exist several types of vehicles that can help facilitate these charitable contributions. I have previously discussed the tax “win-win” associated with donor advised funds – accounts that parties can use to deposit assets for charitable donations over time. Divorcing couples who cannot agree on how to divide an asset may consider donating that asset directly or putting that asset into a donor advised funds.

Parties may further agree that one or both parties will contribute a certain number of dollars to a donor advised fund annually. Similarly, charitable remainder trusts are another vehicle available to divorcing couples. If a party plans to donate assets to charity, he or she could establish an irrevocable charitable remainder trusts that provides the income generated from the trust’s assets to their former spouse for a set period of time, after which the trust assets transfer to the designated charity. The spouse who donates the assets to the CRT may also enjoy the tax benefits associated with the charitable donation.

Overall, divorcing couples should consider incorporating charitable contributions into their final agreement. By working with qualified financial advisors and family law attorneys, divorcing couples can explore the best ways to incorporate charitable giving into their property division and create a positive legacy that will endure beyond their marriage.

This article originally appeared as a column for the Cleveland Jewish News.

22-year high mortgage rates another hurdle for divorcing couples

By Andrew Zashin*

As mortgage interest rates soar to a 22-year high, divorcing couples face yet another hurdle as they work to disentangle themselves from one another. With the average 30-year fixed mortgage rate exceeding 7%, divorcing couples must make increasingly complicated decisions regarding property division, housing arrangements and the overall financial stability for both parties involved.

Divorcing couples often have an emotionally charged time determining what to do with the family home (also called the “marital residence”). Traditionally, there are two primary ways of addressing a family home encumbered by a mortgage during a divorce. In the first option, one party keeps the home and refinances the mortgage to remove the other party’s name from the debt and to buy that spouse out of any equity that they have in the home. In the second option, the parties sell the home, pay off the mortgage and divide the proceeds.

With interest rates at a 22-year high, however, the first option is becoming increasingly less desirable as the party looking to refinance can end up with significantly higher monthly payments under the current rates. While one may think that has caused parties to default to the second option and sell the home, falling housing prices and the anticipated downturn in the housing market have deterred some parties from selling their homes at this time, particularly if the sale may lead to a loss.

This has led couples to embrace creative solutions regarding jointly-owned property. Some couples opt to continue owning the property together, and in some cases even continue to live together, until refinancing becomes more appealing. Some eligible parties have explored mortgage assumption, the process of transferring an existing mortgage to another party. Other parties are deciding not to refinance and are electing to remain on the mortgage while the spouse remaining in the residence repays the other spouse’s portion of the equity over time.

The decision to “wait out” the market or extend the time frame for refinancing post-divorce, how-ever, does not come without risks and difficulties. A party that agrees to remain on the mortgage risks credit score implications and may face difficulty immediately qualifying for another mortgage. This may prevent that spouse from securing a new residence until their name is removed from the underlying mortgage on the marital residence.

High mortgage interest rates do not just impact property division in divorce. A higher interest rate environment might lead to tighter budgets and financial strain, affecting each spouse’s financial stability post-divorce. This can influence negotiations over spousal and child support payments.

Ultimately, mortgage interest rates can significantly impact divorce proceedings, shaping decisions about property division, housing arrangements and support. As couples and their legal and financial representatives navigate the complexities of the divorce process, they must consider the potential effects of these mortgage interest rates on short-term and long-term financial outcomes. By weighing these economic realities, individuals can make informed decisions that set the stage for their post-divorce financial well-being.

This article originally appeared as a column for the Cleveland Jewish News.

Insurance revenge: an unfortunate weapon of vindictive partner

By Andrew Zashin*

Couples sharing auto, health and homeowner’s insurance, or who have named each other as beneficiaries of life insurance policies, face the task of disentangling these policies if they choose to divorce or otherwise separate. As break-ups often bring out the worst in people, however, vindictive partners may try to weaponize these policies to cause harm or exert control over the other party. This destructive and manipulative tactic is referred to as “insurance revenge.”

Insurance revenge occurs when a partner intentionally undermines the other party’s financial security by tampering with insurance policies. This can include canceling policies without consent, removing beneficiaries, manipulating coverage, or failing to pay premiums, leaving the other party vulnerable to potential financial and health risks. By targeting insurance policies, the individual aims to create financial instability, disrupt healthcare coverage, or cause emotional distress to their former partner.

Insurance revenge can have severe consequences for the victim, both financially and emotionally. Manipulating or canceling insurance policies can leave the victim exposed to unexpected expenses, loss of coverage, or financial ruin. If the offending party tampers with health insurance policies, the victim may face difficulties accessing necessary medical care and treatment. Destruction or sabotage of insured property can result in significant financial losses and emotional distress. Further, tampering with insurance policies may complicate divorce proceedings, leading to extended legal battles and increased stress for both parties, but particularly the victim.

How can you protect yourself from insurance revenge? First, stay in regular contact with your insurance providers throughout the separation. As soon as you are aware of the impending separation or divorce, notify your insurance providers in writing about the situation. Request that they immediately inform you of any modifications or cancellations made to the policies and require your consent for any changes.

Next, you should gather and maintain thorough documentation regarding all insurance policies, including copies of the policies themselves, premium payment records, and any correspondence related to the policies. This evidence is critical in assessing any changes made and supporting your case if insurance revenge occurs.

Further, if you are going through divorce proceedings, I encourage you to consult with an experienced family law attorney who can help you understand your rights, navigate the complexities of divorce proceedings, and protect your interests. If you are concerned about insurance revenge, talk with your attorney about obtaining temporary court orders to preserve the status quo regarding insurance policies until the divorce is finalized.

If you suspect insurance revenge or notice unauthorized changes to your policies, promptly report the incident to the insurance carrier, and your attorney if you have one. They can help you take appropriate legal action and address the issue. You may also want to consider obtaining independent insurance coverage if you currently hold joint policies with your partner. This will provide you with greater control over your policies and reduce the risk of tampering.

Insurance revenge during can have devastating long-term consequences. By employing protective measures such as maintaining regular communication with insurance providers, gathering documentation, and seeking legal advice, however, individuals can mitigate the risk of falling victim to insurance revenge and protect their emotional and financial well-being.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:03-05:00July 21st, 2023|Divorce, Insurance, Insurance Revenge|

Who claims kids? Tax considerations for divorcing parents

By Andrew Zashin*

Among the many issues that divorcing couples with children must face is one often worth thousands of dollars: who will claim the kids on their tax returns? As tax season begins on Jan. 23, let’s look at some of the child-related tax benefits that should be considered during a divorce.

Child Tax Credit

According to the IRS, the Child Tax Credit helps families with qualifying children get a tax break. For the 2022 tax year, individual filers who earned less than $200,000 can receive a $2,000 credit toward their outstanding federal tax liability per qualifying child age 16 or younger. For individuals who earned more than $200,000, the Child Tax Credit amount is reduced by $50 for each additional $1,000 of income until it is eliminated. Those whose Child Tax Credit amount exceeds their 2022 tax liability may be eligible for a tax refund of up to $1,500.

In order to qualify for the Child Tax Credit, a parent must have a qualifying child live with them for at least half of the year and must cover at least 50% of that child’s expenses. A parent can allow the other parent to claim the Child Tax Credit for a particular child, however, by executing IRS Form 8332.

Earned Income Tax Credit

The Earned Income Tax Credit is a fully refundable tax credit for those with low-to-moderate earned income. Similar to the Child Tax Credit, the Earned Income Tax Credit is a credit, not a deduction, which means that it directly reduces the amount that you owe to the federal government. The amount of Earned Income Tax Credit a parent is eligible for depends on income, filing status and the number of qualifying children you have. No Earned Income Tax Credit is available for a single filer earning more than $53,057 per year. Unlike the Child Tax Credit, the Earned Income Tax Credit can only be claimed by the parent who the qualifying child lived with for more than half of the year.

Child, Dependent Care Tax Credit

For working parents with children who are disabled or under the age of 13, the Child and Dependent Care Tax Credit is available to offset the cost of providing care for these children. The amount of the credit is a percentage of the amount of work-related expenses paid to a care provider based on the parent’s adjusted gross income. The total expenses that a parent can use to calculate the credit may not exceed $3,000 for one qualifying child or $6,000 for two or more qualifying children. Similar to the Earned Income Tax Credit , the Child and Dependent Care Tax Credit can only be claimed by the parent who the qualifying child lived with for more than half of the year.

Head of Household Status

An unmarried parent who paid the majority of their home upkeep costs in 2022 and who had a qualifying child live with them for more than half of the year may be able to file under head of household status. There are two main advantages to filing as head of household: a higher standard deduction, $19,400 versus the $12,950 available to single filers, and the potential to be taxed at a lower tax rate. A parent may still be eligible to file as head of household even if the other parent can claim the qualifying child for purposes of the Child Tax Credit.

These are just a few of the child-related tax issues that parents should consider when divorcing. I encourage you to consult with your accountant or a tax professional to see which of these, and other, child-related tax benefits you may be able to utilize.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:04-05:00January 19th, 2023|Child-Related Tax Benefits, Divorce, Tax Breaks|

Inflation proving to pose an impact on divorcing couple

By Andrew Zashin*

It feels today as if inflation is everywhere. You read about inflation in the paper, hear about it on the news and feel it in your pocketbook. Just this week, Sept. 21, the feds raised rates the highest its been since the global financial crisis in 2008. In other words, rising inflation is impacting our lives in multiple ways. For individuals contemplating divorce, it is important to consider both the negative and positive effects inflation may have on a divorce settlement.

Let’s start with the good news first. Home values remain high in part due to inflation. According to the Federal Reserve Board, the median sales price for a home located in the Midwest was $412,400 as of June. For many couples, the marital home tends to be the largest asset that the marriage holds. This means that a divorcing couple who agree to sell the marital home, can take advantage of the current inflated market and likely obtain top dollar for the marital home.

Here’s the bad news. Separating couples may find it difficult to secure new housing following the sale of the marital home. Higher mortgage rates and home prices are reducing affordability for buyers and driving up demand for rental accommodations. However, those individuals who can wait out the inflated housing market by living with friends and family can fare well following the sale of the marital home.

In other not so great news, separating couples are going to find that their dollar isn’t going as far as it once did. It is normal for separating couples to feel some financial pinch since uncoupling typically results in a reduction of household income (two incomes divided by two) but an increase in household expenses given the running of two households. However, due to inflation, that financial pinch has been upgraded to a financial squeeze. According to Reuters, food prices increased more than 11.4% over the past year. Further, household furnishings, motor vehicles, prescription costs and health care prices all increased by at least 0.4% over the last month. This means that a newly single individual will not only have to deal with the loss of their former spouse’s income, but will also have to manage an increase in regular household expenses.

If you are considering divorce in this current economy, it is a good idea to not only speak with an attorney, but also a financial planner. Both professionals can assist you in deciding what assets of the marriage will help you the most while also helping you understand your post-divorce financial life.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:05-05:00September 23rd, 2022|Divorce, Financial Wellness, Inflation, Separation|

Divorce can be made easier when consulting attorney

ALEX KRUTCHIK | Cleveland Jewish News

Going through a divorce can be one of the most stressful events in life. There are many ramifications both in your social life as well as your financial situation. This can be especially true for those who were married a long time and established a life together in older age.

Jill Friedman Helfman, co-partner-in-charge with Taft Law in Cleveland, and Andrew Zashin, co-managing partner with Zashin & Rich Co., LPA, in Cleveland said there are a few steps people can take to make the process as smooth as possible.

Zashin, who also writes a law column for the Cleveland Jewish News, said the most important thing he tells clients is a person needs to be their best advocate. Every client knows their story better than anyone else, so they have to be very clear about their story, he said. When they go to meet their lawyer, they have to be prepared.

“What the client needs to be able to do is tell the lawyer their story in a digestible, understandable and useful way,” Zashin said. “That is going to help the lawyer understand them and the case better. Every client needs to be their own storyteller, and they need to do that in a compressed, understandable, compelling and persuasive way.”

Helfman said the first thing she advises clients to do is to become knowledgeable about their financial situation.

“A lot of times, there is one spouse who is the hands-on person with the money,” she said. “Maybe they pay all the bills and figure out where the investments go. And the other one isn’t as knowledgeable. So, at the beginning, the first thing you really need to do is to understand what your finances are, perhaps gather documents so you can become more knowledgeable and interview attorneys to try seeing what the right fit is.”

A common mistake Zashin said he sees is overdependence on the lawyer, their predictions and on the preparation they can do.

“If you don’t relate facts clearly to them, the lawyer can’t know things if you don’t tell them everything,” he said. “You have to make sure that your lawyer is armed with the best possible information. You have to take some responsibility for your own case. You can’t just hire them and expect the lawyers to run with the ball and know everything about you, your case, the facts, and every last bit of information. You have to be present. Not just physically present, but in the figurative word ‘present’, you have to be involved in your case.”

Helfman will ask her clients about their goals, whether it’s five or 15 years down the road. These questions can include whether they want to stay in their current home when their children get out of school or if they want to move to another city, she added.

Once she sees their financial picture, she will work with the client to see if they’re able to meet those goals or if there’s a way they can negotiate something that allows them to do that.

“For example, if they say ‘in 15 years, I want to make sure I have a house that’s fully paid for,’ then we have to look to see if we need to, for example, trade retirement dollars for cash so that the person has enough cash to have no house payments,” Helfman said. “Maybe they want to take some of the investments that the parties have and pay off the house that they have so that they have no mortgage because they don’t want the pressure of that.”

However, Zashin said divorce proceedings can bring positive change, too. He said people may have been financially inefficient during their marriage, and that a good lawyer can create new efficiencies in the divorce process.

“If you’ve been doing bad things financially, it’s possible to create new efficiencies that hadn’t been explored before,” Zashin said. “If people have been wasteful with their money, now’s a chance to retool. You may be able to find ways to do things better and more efficiently in terms of how you’ve saved, how you invest and clean up your act. And in the case of a situation where people are young enough, you can start accumulating wealth.”

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:07-05:00November 22nd, 2021|Divorce|

Uncertainty weighed on divorce cases during pandemic

By ALEX KRUTCHIK | Cleveland Jewish News

The past year forced many people to face situations never experienced before. Because of COVID-19 lockdowns that swept the country for months, many people stayed with the person that lived in their house with them, whether it was roommates, parents or spouses. Because spouses were together nearly constantly, many theorized that divorce rates would go up.

Jill Helfman, co-partner in charge of the Cleveland office of Taft Law, and Andrew Zashin, co-managing partner at Zashin & Rich in Cleveland, said there are fewer people getting divorced than before.

Zashin, who also writes a law column for the Cleveland Jewish News, said in times of financial stress, people stay together, rather than the opposite. Sometimes hardships bring people together, while sometimes they simply can’t afford to get divorced.

“The opposite is also true,” he said. “In times of financial plenty, where people feel richer, they are more inclined to act out. People take rash moves, financially and personally, when they feel rich. So when the stock market’s exploding, when people’s 401ks are bursting at the seams, that’s when divorce rates go up. So I do not think the pandemic created the divorce explosion.”

Because of the pandemic, many people were uncertain if they were going to have a job or if their income was going to go down.

Helfman said this had a big impact on business valuations during divorce cases. The economic uncertainty made it difficult to grasp how valuable an owner’s business would be, she said.

“There was a lot of uncertainty,” she said. “I think the biggest impact for my cases was valuation from business valuation. So, normally when an expert does a business valuation, they’re looking at maybe five years back of historical earnings and other financial data. When you are in the middle of a pandemic, five years back means nothing because that business may not be operating and may have been shut down.”

On top of the complications the pandemic brought to this process, Zashin also said that it might have been more beneficial for some couples to stay together. Because of the economic situation, staying together can provide somewhat of a safety net.

“I think that necessity keeps people together, and unless they’re just completely reckless and they throw caution to the wind, there are still economic reasons why people get together and why they bundle expenses,” Zashin said. “If two people live together, they share one living room and they share one kitchen, it’s economically better to partner. And that’s also true in terms of stress. There have been studies that prove the greatest destroyer of wealth in the United States is divorce.

“If you’re very young and maybe you have no children, or young children, it may be cheaper to get out. If only one party is carrying the financial load and the other party isn’t gainfully employed, it may make sense to get divorced. If the kids are out of college and the economic partnership has worked for many, many years, maybe it doesn’t make sense to get divorced.”

Helfman said depending on where you lived, the courts were basically closed. This caused divorce cases to move through the entire system very slowly.

“You couldn’t get a trial,” Helfman said. “Eventually, courts became open through Zoom, but a lot of people want to be in person. I mean, to this day the Cuyahoga County Domestic Relations Court is still not open to the public. You have to get permission, and there’s only one courtroom per day that they allow to be used. Divorce cases aren’t moving through the system very quickly.”

This article originally appeared in the Cleveland Jewish News.

2023-11-10T13:38:07-05:00June 16th, 2021|COVID-19, Divorce, Pandemic|

What Gates’ divorce means for philanthropy

By Andrew Zashin*

On May 3, well-known philanthropists Bill and Melinda Gates announced they were ending their marriage after 27 years. Within her petition for divorce, Melinda Gates cited that the parties do not have a prenuptial agreement, but are asking the court to divide their assets pursuant to the terms of a mutually agreed upon separation agreement.

Presently, the terms of the separation agreement are unknown and are the cause of much speculation with media analysts. As a divorce attorney, my first thought went to the separation agreement, but then my focus shifted to the future of the Gates Foundation. More specifically, given their long history of charitable action through their foundation, I was concerned their divorce would put an end to their philanthropic efforts.

Bill and Melinda Gates created the Bill and Melinda Gates Foundation in 2000. The foundation contributes money and support to fight a multitude of problems such as climate change, poverty, gender inequality and, most recently, COVID-19. It is estimated since 2000 the foundation has spent over $53 billion to combat, “poverty, disease and inequity around the world,” according to its website. In 2020, the foundation donated over $1 billion to fight the spread of COVID-19. Money from the foundation went to assist with COVID-19 testing along with development and distribution of vaccines to prevent the spread of the virus.

According to candid.org, the Gates Foundation is the largest private charitable organization (i.e. a charitable entity that does not accept funds from the public) in the United States. The foundation, however, has locations not only in the United States, but also in India, China, Europe and Africa. According to the foundation’s website, the foundation has funded grantees in 48 states and the District of Columbia, and funded work in 135 countries in 2019 alone. More impressive, the foundation has already funded over 230 grantees in 2021. In addition, it is estimated that the foundation holds over $40 billion in assets.

At present, the Gates are indicating that both parties will remain co-chairs and trustees of the foundation despite the ending of their marriage. As a divorce attorney who works with divorcing or divorced individuals on a daily basis, I can say the Gates’ decision to continue to work together is extremely rare. For one, it is difficult for some divorced individuals to put aside feelings that potentially contributed to the divorce in the first place.

As a result, negativity can bleed into daily dealings and poison even the most benign conversations. In addition, divorced couples continuing to have close financial ties with each other following the termination of the marriage is uncommon. Many Ohio courts prefer couples make a complete financial break. The reason being, is a “clean break” prevents the divorcees from hovering over one another’s future financial decisions.

At this time, the Gateses do not appear to be concerned about making financial decisions for the foundation together as they have chosen to maintain their longstanding roles within the foundation.

Hopefully, in maintaining these current roles they will continue to work toward helping people live healthy, productive lives.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:07-05:00May 20th, 2021|Celebrity Divorces, Divorce, Philanthropy|

5 questions to ponder when contemplating divorce

By Andrew Zashin*

Getting divorced is hard enough and the division of real property can make it even more contentious. Often, real property is one of the largest assets to be divided and considerable money could be at stake. Add in a dash of emotion (memories were made there, and children raised), not to mention the headaches of moving and the prospect of uprooting children, and it is really no wonder that real property division can be such a major source of fighting. Inevitably, the same questions come up at the beginning of case after case. Family law practitioners are often asked these questions:

• The house is in my name only/my spouse’s name only/both names. Does that matter?

With limited exception, no. If the property is an asset of the marriage, it is irrelevant whose name is on the deed. Just because only one person is in title does not keep it from being a marital – and, thus, divisible – asset.

• My spouse is threatening that the house will have to be sold. Is that true?

Not necessarily. Generally speaking, the property will either be kept by a party or it will be sold. Which option is appropriate in any given case will depend on who wants the property, and that person’s ability to financially support it and to buy out the other’s interest. If the parties cannot reach an agreement as to who is keeping the property, then the court is probably going to force a sale.

• How do we divide the house?

While it’s true that there are documented cases of parties dividing homes with chainsaws and walls, as a practical matter the property is going to be divided by dividing its equity. If it is sold, the equity is easy to figure out. It’s on the check that you get from the title agency, and the question is simply how the net proceeds of the sale should be allocated. But if one party is going to keep the real property, then the question is at what price does the retaining party buy out the other?

The buyout price would be one-half of the marital value. The marital value would be the fair market value (as determined by agreement or an appraisal), less any outstanding debt owed on the property and accounting for any separate property interests on either side. In a buyout situation, the retaining party may be expected to come up with some cash for the buyout, or else the buyout price may be offset against some other asset. Outstanding liens may have to be refinanced into the sole name of the retaining party.

• I put money into the house/owned the property before the marriage/inherited the property. Can I get it back?

As long as it’s traceable, separate property can usually be recouped. However, traceability can be challenging when it comes to real property because of several competing factors. Often, marital funds are being used to build equity, via things like mortgage paydown and renovations, and it can be difficult to determine which part of the equity is marital and which is non-marital, especially in volatile markets. And, often, needed records were lost to time or never kept at all.

• What about real property that we don’t live in?

The same analysis applies whether the property is your primary home, an investment property, a vacation property, or even a home that you maintain for an adult child. Rental income does not typically factor into the property division – except if its income earning potential makes it more valuable – but rental income would be considered in other financial aspects of the divorce, such as for support purposes.

Each situation is unique and there are numerous caveats to each answer. It is always best to consult with a domestic relations attorney for a more thorough analysis of your specific situation.

This article originally appeared as a column for the Cleveland Jewish News.

2023-11-10T13:38:10-05:00July 17th, 2019|Divorce, Property Division|
Go to Top