Divorce and selling a home or other real estate are probably two of the most stressful life events. In divorce proceedings, New York is an equitable distribution state when it comes to division of property. This means that property acquired before the marriage belongs wholly to the spouse who brought it into the marriage, and the other spouse has no right to it. The exceptions to this rule are when the name of the other spouse has been added to the deed during the marriage, the other spouse has been involved with the property, such as contributing to mortgage payments, or the property has appreciated in value due to the other spouse's marital efforts.
However, when property is acquired during the marriage, except for property acquired from an inheritance to one spouse, or a personal injury award to one spouse, it is considered to be jointly owned by the spouses, even if the name of one spouse does not appear on the deed. In divorce proceedings, real estate matters are settled in one of the following situations -
1.The house is sold immediately, and the equity is split between the parties. The equity is the difference between the appraised market value of the house and the balance due on the mortgage. In order to save on capital gains tax, there is an enormous financial incentive to sell the house while still legally married. The couple can exclude up to $500,000.00 in profit from capital gains tax on the sale of the house while this amount drops to $250,000.00 if a spouse is divorced and single. To be eligible for these exclusions, the spouses must have lived in the house for two of the last five years, and the house must also be their personal residence and not be used for investment purposes.
2. One of the spouses buys out the other 's legal interest and keeps the house, usually by refinancing the mortgage and removing the other spouse's name from the deed where both parties signing a "Quitclaim Deed";
One spouse keeps use and occupancy of the house for a specified period, which is typically when the youngest child reaches 18 years old at which time the house can be sold.
LEGAL REPRESENTATION: Our law firm has represented countless clients over the years in all aspects of the sale of real estate,such as houses, co-operative apartments and condominiums in divorce settlements. We prepare the sales contract, title report, review mortgage documents, liaise with the buyer's attorney and close the deal. We also prepare quitclaim deeds to transfer property to the other spouse, as well as representation in the refinance of mortgages.
REAL ESTATE BROKER: When selling a home during a divorce, selecting a realtor who has a strong track record of success and familiarity with the local housing market is critical. Our office partners with realtors in all five boroughs of New York City, with expertise and integrity who have successfully marketed properties and represented our clients in the sale of their real estate.