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What happens to real estate in a Virginia divorce?

On Behalf of | Jun 20, 2024 | Family Law

In Virginia, the law requires that property division during divorce be fair. Reaching a fair outcome can be challenging, however, especially when a couple has made significant investments in real estate. Knowing how to manage these assets can help both parties reach a fair agreement and might even prevent long-lasting disputes.

Significant investments can be the cause of significant conflict.

Real estate can often lead to major disagreements. For many couples, real estate makes up a large part of their assets, and dividing it can be a tough part of many divorces. In fact, around 53 percent of divorcing couples own their home. Some may own other properties, whether they purchased a vacation home or invested in a property for their business.

No matter the reason for buying these properties, they represent significant financial and emotional investments that can cause major conflicts in a divorce. For instance, if one spouse thinks a property is worth more than the other does, they may disagree on what a fair division looks like. Also, if one spouse wants to keep the home but cannot afford to refinance the mortgage on their own, deciding how to move forward can be difficult.

Who owns the property?

In Virginia, couples usually own most property acquired during the marriage together, and this marital property is the property that courts will divide. Any property that one spouse owned before the marriage or received during the marriage as an inheritance or gift from someone other than their spouse generally stays with the original owner.

However, it is possible for a part of the value of properties like real estate to be marital property. For example, if one spouse bought a home before getting married and paid the mortgage with marital funds, part of the home’s equity might be marital property. Similarly, if the spouse whose name is not on the title makes improvements that increase the property’s value, they might have a claim to that increase.

How do you divide real estate holdings?

After figuring out if your home is marital property, you face the decision of what to do with it. Couples can choose whether one spouse will keep the property and buy out the other’s interest, whether they will sell the property and split the proceeds along with other property, whether they will remain co-owners or whether they will arrange something else.

Because dividing real estate can be financially and emotionally challenging, couples should seek both financial and emotional guidance during this tough time. The right advice can help you make informed decisions about real estate during property division and work toward an equitable outcome that protects your finances.