Typically, when you go through a divorce in California, your house is sold and you and your ex split the profits from the sale. However, if you’re a real estate investor who has a portfolio, you may want to consider protecting those assets during your divorce. Here are the best options available to you.
Consider buying out your ex
The easiest way to protect your real estate assets and avoid an adverse property division result is to buy out your ex-spouse. Make an offer to do that and see if they’re interested. If they don’t care about partaking in the business, a buyout is a great idea. You simply need to hire a professional to give you an estimate of the value of your portfolio so your ex can get their fair share.
Be careful if you buy out your former spouse. Don’t just write them a check. Instead, check with the pros before you make any moves. It allows you to have documentation as proof if any disputes arise in the future.
Form an LLC
With property division, things are normally split between you and your spouse. However, another way you can protect your real estate portfolio is to form an LLC and transfer your assets to it so that you have full control. However, the best option for forming an LLC to protect your real estate assets is to do that before you even get married. If that is the case, the court views your assets as your property rather than marital property, which means they won’t be divided during your divorce.
Establish a domestic asset trust
A domestic asset trust may be a good idea as well. It’s more complex than forming an LLC, but it can protect your real estate assets during a divorce. When you put your assets into a trust, they are out of your name, but you are free to name yourself as the beneficiary. However, like the LLC option, it’s best when a trust is created before your marriage.
If you have real estate assets you wish to protect during your divorce, it can be complicated. However, taking action earlier rather than later can definitely help your chances.