Transfer of Property During a Divorce
During the divorce process the individuals will always have to deal with the division of the home and vehicles and it is essential that the parties understand how these assets are divided. Other than the retirement accounts these assets are the most significant properties most couples have acquired and the value of these properties can have significant impact on the process of divorce.
During our latest economic downturn many couples lost the value in their home and often when they reached the point of divorce the home was in foreclosure or was valueless or “upside down” in equity. This made the issue of the division of the home simple as there was no value to divide, neither party desired ownership and often the property was sold or foreclosed. As homes regain equity and value couples once again confront the reality of dividing this asset. The most important aspect in this division is the valuation of this asset, which is usually done by a third party appraiser and/or a Realtor. It is essential that you determine what if any equity exists in the home; which is the potential value left after the mortgage and any liens or closing costs are paid from the sale of the home. Once this number is determined you can decide what is the best method of dividing this asset. One party may feel strongly that they wish to remain in the home but if there is $100,000.00 in potential equity in the home they are going to have to give the other party $50,000.00 as their share of this equity. They must then determine if this is beneficial and when and how they can refinance the home to not only take the other parties name off the mortgage but pay the equitable obligation. Often at this point the parties realize neither can afford the home alone and a sale is necessary. If this is the case a realtor should be contacted to give possible sale prices and include the closing costs necessary as these will come out of the equity. In the end it is important to remember that keeping the home may not mean simply keeping the home, but usually involves buying the other party out of their interest in the home.
Similarly to the home titles must be transferred with vehicles if necessary. However, when transferring the title to the homes it is important to remember that Georgia now taxes the transfer of these vehicles as a sale if done after the divorce. This is important to factor into the divorce process as many people finalize the divorce and then complete the transfer of the vehicles only to receive a multi thousand dollar tax bill. This transfer MUST be done before the divorce is final to avoid this tax. Regardless of the property always make certain that strong indemnity language is attached to the transfer.