A Review of Equitable Division in Iowa

Iowa follows the principle of equitable division when dividing marital property during a divorce. Equitable doesn’t necessarily mean equal or 50/50. Rather, it means fair, taking into account various factors such as the length of the marriage, each spouse’s contributions (financial and non-financial), and each party's financial needs and earning potential post-divorce.

When it comes to shared real estate, including the family home, vacation homes, or rental properties, the court will typically consider these as marital assets, meaning they are subject to equitable division unless the property was acquired before the marriage or otherwise falls under the category of separate property (e.g., inheritance or gifts).

How Does the Court Divide Shared Real Estate?

If the couple cannot agree on how to divide their shared real estate, the court will decide how to handle it, following equitable distribution principles.

There are a few common outcomes when dealing with shared real estate during a divorce:

1. Selling the Property and Dividing the Proceeds: The most straightforward method is to sell the property and divide the proceeds between the two spouses.
2. One Spouse Retains the Property: In some cases, one spouse may wish to keep the property, especially if it’s the family home and children are involved.
3. Co-Ownership After Divorce: Occasionally, couples may choose to continue co-owning the property, especially if there are financial or practical reasons to do so (e.g., one spouse wants to continue living in the house temporarily while transitioning).

Methods for Retaining Shared Real Estate

If you don’t want your home or other real estate to be sold and divided during your divorce, there are options to consider. One of the most common ways to retain real estate during a divorce is by negotiating a buyout. If you want to keep the property, you will need to pay your spouse their share of the equity in the home. This can be done by either refinancing the mortgage in your name alone or using other marital assets (such as retirement accounts, investments, or personal savings) to offset the value.

If you don’t have the funds to buy out your spouse’s share, another option is to negotiate an exchange of assets. This could involve giving your spouse a larger share of other assets, such as savings accounts, vehicles, or retirement funds, in exchange for keeping the home. This strategy can help you retain the property without a direct cash buyout.

In situations where selling the home immediately isn’t practical or desirable (perhaps due to a declining real estate market), you may be able to negotiate a deferred sale. In this arrangement, you and your spouse agree to retain joint ownership for a set period before selling. This is often done when one spouse wants to remain in the home temporarily, usually until the children reach a certain age.

Tips for Divorcing Couples with Shared Real Estate

If you are considering divorce and are concerned about what will happen to your shared real estate, there are a few practical steps you can take:

1. Get an Accurate Valuation: Before negotiating the division of property, ensure you have an accurate valuation of your home or other real estate. This will help both parties understand the actual value of the property and make informed decisions about buyouts or exchanges.
2. Consider Your Financial Situation: Retaining the home is only a good idea if you can afford it. Consider not only the cost of buying out your spouse’s share but also the ongoing costs of maintaining the home, including mortgage payments, taxes, insurance, and upkeep.
3. Work with an Experienced Attorney: An experienced family law attorney, like ours at The Law Office of Mark R Hinshaw, can help you explore your options, negotiate effectively, and guide you through the process of retaining real estate in your divorce.

Dividing shared real estate during a divorce can be one of the most complex and emotionally charged aspects of the process. If you’re concerned about what will happen to your shared real estate, contact us today to discuss your options and develop a strategy that works for your unique situation.