Negotiating a fair divorce settlement in an unpredictable real estate market
As of Oct. 31, 2022, Florida home values had increased 25% in the year just passed, according to Zillow. If we have learned anything, the real estate market can be volatile under unforeseen pressures.
Recently, unpredictable events have impacted values within the real estate market and of individual homes – think the pandemic, hurricanes and tropical storms, elections and their consequences, unstable and unsafe oceanside properties, interest rates, inflation and other factors.
On a personal level, owner action or inaction can impact residential values. For example, value is likely to rise when the owner invests in improvements and upgrades or adds an addition. On the other hand, value could drop if the owner does not properly maintain the premises or regularly update the style.
But what impact does fluctuating home value have if you are a Floridian going through a divorce? How and as of what date is the home’s value established for purposes of dividing the couple’s assets?
Marital settlement agreement
A divorcing couple with a family home may be able to negotiate questions of home value and distribution as part of a settlement agreement. However the litigants’ home is ultimately distributed, a realistic valuation of this major asset is required for fair negotiation.
A family lawyer can assist with this question by consulting with experts like real estate agents, mortgage brokers or home appraisers about the residential value and the likelihood that it will fluctuate. The couple could agree to a particular date for valuation (dates like those of separation, filing of divorce, last day of trial, date of final divorce decree or another date), or they could just agree to place a specific value on the home.
Anticipating what the judge is likely to do if the couple is unable to agree is a key factor to understand in order to negotiate from a strong, informed position.
In part 2 of this post, we will discuss the process a judge goes through to assign a valuation date for the marital estate, including the family home.
