Rental Property Division During a Massachusetts Divorce: Will You Keep the Property?

In any Massachusetts divorce, asset division can be a challenging issue to address. In the state, all property can be divided equitably between spouses. Thus, assets should be split fairly, which may not mean equally.

Rental property may be a big asset in a marital estate. If you and your spouse own this type of property, you must decide how to divide it during divorce. But division of rental property involves the same steps when splitting other assets. The process includes assessing property value, adding this value to the estate, and apportioning a share of the value to every party. An experienced Massachusetts divorce lawyer can help you handle rental property properly during divorce.

Rental Property Appraisal

To handle rental property during divorce, it must be appraised by a professional. This protects yourself and helps you learn about its value. Through the appraisal, you may know that the rental property is an asset, income source, or liability. You may forego a professional appraisal and just depend on your spouse’s property valuation. While this may save you money now, it can cost you a huge amount in the long run.

Let us say your spouse claims that the value of the rental property is $100, 000. You may be okay with taking an equivalent value from a retirement account during property division. But if your spouse tells you later that the property is worth more than $200, 000, you will not have another recourse. This makes it important to have the property professionally appraised before splitting assets in a divorce.

How to Handle Rental Property When You Get a Divorce

During a divorce, one spouse can keep the rental property while the other spouse gets assets that have equivalent value. For instance, you might be willing to keep the family house while your spouse gets the rental property as part of asset division in your divorce. Such kind of division is easier and avoids the additional fees and taxes related to selling the property. But sometimes, just splitting properties this way is not feasible. In this case, you may need to sell the property and split the proceeds equitably.

Managing Rental Income

If the rental property is currently generating an income, this must be taken into account during the divorce process. Your lawyer can help you determine how to best handle such an aspect of your divorce. They may advise you to put aside funds in a property management account or trust. Funds from this account can be withdrawn for expenses associated with the rental property like taxes, maintenance, or insurance. Then, the rest of the funds are split as part of the asset division.

Another option is to split the monthly income of the rental property. Your lawyer can draft an agreement that governs this arrangement’s details to protect your interests until the finality of your divorce. After the completion of the divorce, you and your ex can sell the property or have one spouse keep it. At this point, rental income will be dealt with.

A skilled divorce attorney in Massachusetts understands the specific issues that usually arise in divorces, including property division, child custody, child support, and alimony. With their knowledge of state law and ability to resolve matters beyond the courtroom, a divorce attorney is the best resource for those who are thinking about divorce.

Family law courts in the state exercise discretion in deciding how to divide rental property based on every case’s unique circumstances. But you and your spouse can negotiate and reach a settlement agreement without going to court. This will provide you with greater control over the property division process.