When a couple divorces, they often sell the home they once shared. The profits from the sale are usually divided between the two spouses. However, if you are preparing for a divorce and are a real estate investor, you’ll need to know about property division regulations to keep your assets safe. Here are some important things to know if you’re a New Jersey resident and own several real estate properties.
Buying out your former spouse
The simplest option for property division usually is to buy out your former spouse, especially if your ex does not want to be in the real estate business as an investor or seller. You should hire a professional to assess the value of your real estate portfolio and then offer to pay your former spouse a fair amount based on the value of the investments in exchange for his or her ownership share.
Instead of simply giving your ex a check, work with your attorney to compose a legally binding agreement. This will give you a paper trail in case a dispute pertaining to the property arises later.
Form an LLC
You can also solve the property division issue by transferring your assets to an LLC. You should become the sole manager of the LLC, but it’s best to control it before you get married to protect yourself in the event of divorce. An LLC allows you to assume the company and the assets that come with it for all nonmarital property. Even if you formed an LLC before getting married, be careful to not combine your personal and business finances once you tie the knot so that your LLC will not be classified as community property.