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Rising home prices could complicate some divorces

Texas is a community property state, so once you divorce, you expect to split the assets you’ve acquired since your marriage.

You assumed, however, that the home you purchased prior to your marriage and kept solely in your name would be your personal property to keep. However, that could be a mistake.

Increases in equity can be considered marital assets

You may have owned the property prior to your marriage, but that doesn’t mean that your spouse has no interest in it today — especially if there has been a significant jump in the property’s equity value. The equity that accrues after your marriage begins is an asset that could be subject to division with your spouse.

In addition, if you put marital funds (like part of your paycheck) into the home’s upkeep or upgrades, the value of those improvements may also be an asset to be divided.

Currently, that could make a complicated divorce even more challenging. Right now, houses are selling for 13.2% more than they were this time last year — and nobody is sure if this is a “bubble” that will soon burst or a new reality that will extend far into the future.

When dividing the equity (or part of the equity) in a piece of real estate, accurate valuations are essential. A valuation done “in a bubble” may not reflect the property’s value once the bubble bursts — and that could cost quite a bit of money to one party in the divorce.

High-asset divorces require more experience and thought

When there is a lot of money on the line, you don’t want inexperienced guidance. Learn more about the legal steps you can take to protect your assets as you divorce.

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