Real estate is just one example of an asset that may fluctuate in value over time. Other examples include stocks, bonds, fine art, and cryptocurrencies. However, real estate is perhaps the most common asset owned by spouses in Georgia, and questions regarding the fluctuation of real estate are, therefore, especially common in divorces. What exactly happens when the value of a family home changes during a marriage – and how might this affect your divorce?
Increases in Value Due to Changes in the Market
If the value of a home increases due to normal changes in the real estate market, this can have various effects on a divorce. First of all, it could cause spouses to receive a higher share of the asset due to the way in which marital property is classified and calculated. Generally speaking, a home is “separate property” if it was owned by a spouse prior to the marriage. In other words, they get to keep the asset.
However, if the home increases in value during the marriage, that net increase becomes marital property. Therefore, a home that increases in value over several decades of marriage could eventually cause a payout to the non-owning spouse – even if the underlying asset is considered separate property.
Increases in Value Due to Improvements
Many spouses choose to improve their properties in various ways after purchasing. Assuming that this represents marital property purchased during marriage, the nature of these improvements may affect property division in the event of a divorce. For example, a spouse who renovates their property with their own labor can expect to get a greater share of the property in the event of a divorce. Due to the principles of equitable distribution, family courts consider these contributions and many others when determining how much each spouse should receive in their “share” of the family home.
What About Decreases in Value?
What if the value of a home decreases during marriage? This isn’t very common in the modern era, but we have certainly seen examples of this in the past due to market changes. An obvious example is the 2008 mortgage crisis, in which the values of properties across the United States plummeted.
It is important to note that spouses are responsible for both assets and liabilities in the event of a divorce. If the family home is marital property, the decrease in property would be shouldered by both spouses. They would, therefore, both receive a lower share than the initial purchase price. The situation may be much more complex in the event of a separate property that decreases in value during the marriage – and you may need to discuss this subject with a qualified, experienced divorce attorney in Georgia.
Find a Qualified Divorce Lawyer in Georgia
If you have been searching for a qualified divorce lawyer in Georgia, look no further than Lankford & Moore Law. Over the years, we have helped numerous spouses in Georgia navigate the property division process with confidence. While this process can be challenging for many, even the most complex issues may be resolved alongside qualified attorneys. Book your consultation today to learn more about how your family home might be divided in the event of a divorce.