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Divorce - Property Division and Mediation

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Table of Contents Three Great Ways to Split the House after a Divorce. Four Tips on How to Prepare For Divorce Mediation. Three Wrong Notions Most People Believe About Property Division in A Divorce. – PowerPoint PPT presentation

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Title: Divorce - Property Division and Mediation


1
Divorce - Property Division and Mediation
2
Table of Contents
  • Three Great Ways to Split the House after a
    Divorce.
  • Four Tips on How to Prepare For Divorce
    Mediation.
  • Three Wrong Notions Most People Believe About
    Property Division in A Divorce.

3
Three Great Ways to Split the House after a
Divorce
  • In the event of divorce, one of the major issues
    that arise is splitting the most significant
    asset between you and your ex own fairly.
  • No doubt, tax implications of a home sale and
    lifestyle plans are part of the decision-making
    processes in a divorce there is no way you can
    dodge the tax and financial consequences.
  • But, what if I told you there are stress-free
    ways to splitting a house after a divorce occurs.
  •  
  • Heres the catch
  • We have listed three effective ways that work for
    most people. Keep reading. You would find out.
  •  

4
  •  1. Purchase your Ex-Spouses half of the House
  • The only way a buyout works is if you qualify for
    a new mortgage, or you have the money at hand.
  •  
  • In reality, the amount you pay your ex-spouse
    does not have to be the exact amount of half
    value of your home. What happens is that you will
    take the larger portion of the savings while your
    spouse gets less than half the home price.
  •  
  • To find out the value of your home, it is best to
    contact a real estate professional to get an
    accurate and recent price opinion. You can also
    pay an appraiser to value your home, but do not
    rely on an online estimate to evaluate your home.
  •  

5
  • If you opt for this option, you have to ensure
    you have a written proof that your ex-spouse paid
    off existing home-equity lines or mortgage. The
    reason for the document is to prove that you are
    no longer responsible for the debt.
  •  
  • The good news
  • There is a possibility that you will not owe any
    capital gain taxes when you sell half of your
    house as part of a divorce.
  •  

6
  • 2. Retain the House and Take Turns Living There
  • There are cases where a family chooses to
    maintain the same house after the divorce. The
    children would reside in the original home while
    the parents take turns to live with the children.
  • In such cases, the parents agree to deduct and
    share the expenses such as property taxes and
    mortgage interest between each other.
  • It is important to note that you can only deduct
    mortgage interest if you are obligated to pay
    from a mortgage or you own the home.
  • Whats more?
  • Keeping the house and taking turns residing
    there give the impression that you and your
    ex-spouse are great parents because the kids are
    put first.
  •  

7
  • 3. Keep the House until the Children Move Out,
    Then Sell It
  • There are cases where one parent chooses to
    remain in the home with the children while the
    ex-partner moved out of the house after the
    divorce. The moment the children move out, the
    parents sell the home and divide the profit.
  • If by any chance, one of the spouses moved out
    and the person has not lived in the house for two
    years in the past five years, there is a
    possibility of owing taxes on the profit gotten
    from selling the home.
  • As long as your divorce agreement highlights your
    plans to sell your home, the IRS will regard it
    as meeting the two-out-of-five-year residence
    rule.
  •  
  • The Perfect Thing To Do
  • It is best to get an experienced property lawyer
    who would help you carry out a comprehensive
    research and get the right allocation you desire.

8
Four Tips on How to Prepare For Divorce Mediation
  • The decision to divorce is one long and difficult
    road.
  • However, if you have made up your mind to go down
    this road, it is best to have a detailed plan
    that would help your transition smooth.
  • What if we told you that there is something you
    can do to get the best outcome you desire.
  •  
  • What is it anyway?
  • Mediation is the answer. The idea behind
    mediation is reaching an agreement that works for
    your life.
  • The agreement also involves you not spending your
    childrens college fund on attorney fees.
  •  
  • What is more?
  • You do not get to spend significant time or
    stress in court. Keep reading. You will get four
    tips on how to prepare for divorce mediation.
  •  

9
  • 1. Accept To Mediate
  • First off, in most states, divorce mediation is
    voluntary the best way to table all the issues
    is to agree to mediate.
  • For the mediation to be effective, both parties
    need to have a meaningful conversation. However,
    this does not imply that you and your spouse have
    to be buddies.
  • Before you agree to mediate, it is necessary to
    go over the advantages and disadvantages that are
    involved before you proceed.
  •  Other questions such as logistics, how the fees
    would be split, what dates and times you need to
    commit to the sessions, and more are necessary to
    ask before proceeding with the whole process.
  •  

10
  • 2. Get Organized
  • Putting things in order is the next thing after
    you have agreed to mediate. Since it is not the
    mediators job to determine what to do with what
    you have, it is crucial to make a list of all
    your assets and possessions.
  • Some of the things you should include are
    retirement accounts, financial products,
    vehicles, all real property, life insurance
    policies, personal properties, etc. In summary,
    do not leave any stone unturnedinclude
    everything you own.
  • Other records that could also come in handy
    include pension disbursements, child support
    payment, social security, paystubs, etc. Expenses
    like utilities, food, mortgage payments, credit
    card payments, car loans, and others should be
    included.
  • It is crucial to consult with an attorney or
    check your local rules for financial affidavit
    during the dissolution process.
  •  

11
  • 3. Set Your Goals
  • The moment you have a comprehensive list, you
    have to decide what you want to do. No doubt, the
    process can be tasking you have to make out time
    to figure out what is most and least important to
    you.
  • You will have to create a list on things you will
    love to get, things you can negotiate, and
    essential things you cannot leave behind.
  • While you are at it, draft a budget and make a
    projection. The projection gives you an idea of
    your post-divorce budget.

12
  • 4. Have Your Kids in Mind
  • Divorce is usually hard on children it is best
    to communicate what is happening to them
    regardless of their ages after all it affects
    their lives too. Both parents must agree and talk
    to the children together.
  • The process will not be easy on your children
    you have to help them through the process by
    providing a loving, positive, and stable
    environment.
  • You also have to consider where your kids will
    spend most of their time.

13
Three Wrong Notions Most People Believe About
Property Division in A Divorce
  • In the US, different states handle the division
    of marital assets and liabilities when a divorce
    occurs.
  • Knowing how the property and debts are divided in
    a divorce is one thing it is another thing to
    know which property is meant to be distributed.
  • The marital property is usually the one subject
    to division in a divorce, while the non-marital
    or separate property is not.
  • In other words, only the property acquired by the
    couple during the marriage is liable for the
    division.
  •  
  • It sounds simple
  • Well, as simple as it may appear, there are a lot
    of misconceptions when it comes to the property
    sharing process in divorcethat is why we are
    going to be thrashing them out in this article.
  • Here, we have listed three common myths about
    property division in a divorce. Hang in there
    you will find out.
  •  

14
  •  
  • 1. Equitable Property Means the Property is
    shared Equal
  • This myth is quite popular amongst a lot of
    people who get their divorce done in court.
  • They always believe that they have a 50/50
    possession of their marital property when the
    judge rules for an equitable distributionwhat
    they do not know is that it means the judge will
    weigh the case based on certain factors called
    the Ruff-Fischer guidelines.
  • The guidelines were first setup in a 1952 case
    involving Ruff v. Ruff it was later modified in
    1966 in the case of Fischer v. Fischer.
  • The factors require the judge to consider the
    earning ability of the parties, their respective
    ages, their physical and health condition, the
    length of the marriage and conduct of the two
    parties while they were still married, amongst
    others.
  • Based on the above factors, the court will strive
    to make an equitable division, not necessarily
    sharing the property equallysometimes, it is not
    a win-win for both parties.
  •  
  • 2. During The Marriage Is The DURATION Between
    The Wedding And Divorce
  •  
  • There is a lot of assumption that the period
    between the wedding and the divorce is
    represented as during the marriage.
  • But here is the kicker
  • The law does not see it in that way. In some
    states, the court gives the divorcing couple the
    chance to pick the date of valuation of the
    marital property.
  • However, the court has the right to annul the
    valuation date if it is unable to agree with the
    proposed time picked by either of the divorcing
    couples or both.
  •  In such cases, the court goes ahead to choose a
    date.
  • So, does this mean anything?
  • Yes, it doesbecause some assets can face a
    drastic fluctuation in value to the date
    alteration.
  •  
  • 3. If I Owned It Before Marriage, Then It is Mine
    Forever

15
  • 2. During The Marriage Is The DURATION Between
    The Wedding And Divorce
  • There is a lot of assumption that the period
    between the wedding and the divorce is
    represented as during the marriage.
  • But here is the kicker
  • The law does not see it in that way. In some
    states, the court gives the divorcing couple the
    chance to pick the date of valuation of the
    marital property.
  • However, the court has the right to annul the
    valuation date if it is unable to agree with the
    proposed time picked by either of the divorcing
    couples or both.
  •  In such cases, the court goes ahead to choose a
    date.
  • So, does this mean anything?
  • Yes, it doesbecause some assets can face a
    drastic fluctuation in value to the date
    alteration.
  •  

16
  •  
  • 3. If I Owned It Before Marriage, Then It is Mine
    Forever
  • It may sound unfair, but it is an absolute fact
    property owned by a party before marriage is not
    excluded from consideration, valuation, and
    sharing.
  •  Except in a case where the assets of one party
    were excluded beforehand by a premarital
    agreement, all the assets owned by both parties,
    gotten individually or jointly, are placed on the
    table for sharing.
  •  
  • Final WordHow NOT To Be Caught Unawares
  • For you to avoid any surprises, it is best to get
    the help of a professional and experienced
    property division lawyerwho will go ahead of you
    to do all the necessary research and findingsso,
    you can be adequately defended in court and get
    your desired assets.
  •  

17
The End
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