Real estate holdings are an especially complicated asset in divorce proceedings for high-net-worth couples. Matrimonial and family law attorneys Atty K. Bruggemann and Sydney B. Goldstein explain the importance of strategic planning and timing in preserving a real estate portfolio while achieving an equitable outcome.

Divorce can be emotionally and financially challenging—especially when real estate is part of the equation. Owning multiple homes is more than an accomplishment—it is the result of vision, planning, and years of disciplined investment.

Whether your properties include luxury vacation estates, income-producing rentals, or a primary residence with substantial equity, divorce can put those assets at risk if you do not take the right steps to plan to retain them. Protecting these assets requires foresight, documentation, and strategic legal guidance.

Advanced preparation and strategic negotiation can mean the difference between preserving your portfolio and losing valuable properties. Here’s what to consider if your goal is to retain your real estate portfolio during a divorce:

Understand How the Law Will Classify Your Properties

In New York, equitable distribution means that the court divides property in a way it deems fair and equitable—not necessarily equal—based on factors such as contribution, earning capacity, and need.

Your first priority should be determining which of your properties are considered marital and which are considered separate property assets. Under New York Domestic Relations Law § 236(B), marital property generally includes assets acquired during the marriage, while separate property encompasses assets acquired before the marriage, by inheritance, or as a gift from someone other than the spouse. However, appreciation in the value of separate property may become marital if it results from active efforts or marital contributions, as opposed to market forces. The nuances of this can be complex, and there are exceptions to every rule. In the court of equity, the determination can be different from one case to the next, based on complicated fact patterns can confuse matters.

Build a Strong and Comprehensive Paper Trail

In any divorce involving significant real estate holdings, documentation is leverage. Collecting clear, comprehensive records is key to protecting your claims. Your legal team should assemble:

• Deeds, closing statements, and purchase contracts;
• Mortgage and payment histories;
• Proof of the source of funds for down payments, renovations, and maintenance; and
• Appraisals and rental income records for investment properties.

The stronger your documentation, the more persuasive your case for retaining ownership or structuring a fair settlement which takes into consideration all of the above.

Negotiate From a Position of Strength

In divorce cases involving substantial real estate portfolios, effective negotiation often hinges on the art of asset trading and strategic concessions. Parties and counsel should approach property division as a calculated exchange—leveraging different asset classes to achieve equitable and desired outcomes. For instance, one spouse may retain a high-value marital property in exchange for relinquishing claims to equity in business interests, marketable securities, or other liquid assets. It’s also important to understand the motivations behind why a party wants to retain a specific asset. Sometimes it isn’t only about a higher monetary value, sometimes sentimentality can hold an even greater value.

A strategic asset trade allows you to protect the properties most critical to your financial portfolio while maintaining overall balance in the settlement. The goal is not to surrender assets, but to exchange value intelligently, ensuring that every concession is purposeful and supported by objective valuation data.

Explore Buyouts and Refinancing Early

Timing is often critical when addressing real estate interests in a divorce. One of the most effective strategies for preserving property value and reducing conflict is to explore buyout and refinancing options early in the process. Knowing your options before they are needed allows a party to show just how the buyout will occur, making such offers more than just a hypothetical.

A buyout arrangement allows one spouse to acquire the other’s interest in a jointly held property. If your spouse has an ownership interest in a marital property that you wish to retain, a timely buyout can prevent a forced sale. This may involve refinancing one or more properties solely into your name, paying your spouse their agreed-upon equity share, and restructuring your real estate debt to optimize cash flow post-divorce.

Early exploration of these options allows you to negotiate with real options and understand how they will also affect your post-divorce life and bottom line. Too often, settlement agreements around real estate include a contingency clause regarding financing—these should be avoided at all costs. For example, if the spouse who wishes to retain a piece of property ultimately cannot get the financing and a property must be sold, the parties have wasted time and may have even missed a prime selling market.

Contingency clauses in agreements should be a last resort and only benefit the party who has not done their homework, while the other party, being bought out is stuck in an if, as and when situation, only to have to then deal with a sale of a property and prolong their ultimate distribution.

Evaluate Post-Divorce Affordability and Tax Impact

While asset division is central to any divorce, long-term financial viability is equally as important. A settlement that appears balanced today must also be financially sustainable tomorrow—a principle that lies at the heart of effective divorce planning involving real estate portfolios.

Once the initial property settlement framework is established, you must evaluate the post-divorce affordability and tax consequences of retaining or relinquishing specific real estate holdings. Real estate comes with ongoing obligations: property taxes, insurance, HOA dues, management fees, and maintenance. Your divorce strategy must account for these carrying costs alongside potential capital gains implications if you sell any property later.

A coordinated approach with your real estate and divorce attorneys, CPA, and financial advisors ensures your portfolio remains sustainable long after the divorce is final.

Consider Creative Asset Solutions

Dividing a complex real estate portfolio need not be limited to outright sales or standard buyouts. In many high-net-worth divorces, creative asset solutions can preserve value, maintain income streams, and achieve equitable distribution while minimizing disruption. Examples of such tailored arrangements include:

• Temporary co-ownership of income-producing properties until market conditions are optimal for sale;
• Structured buyouts over time, with the inclusion of interest payments to a former spouse, to preserve liquidity; and
• Use of trusts or LLCs for asset protection and estate planning purposes.

Ultimately, considering creative asset solutions transforms property division into a strategic opportunity and not a total loss.

Formalize Every Detail in the Settlement Agreement

In cases involving complex asset divisions, nothing should be left to handshake deals. Your divorce agreement should precisely define:

• Ownership rights for each property;
• Responsibility for all expenses and liabilities;
• Timelines and conditions for refinancing or buyouts; and
• Consequences for default

Clear and unambiguous language ensures that both spouses understand their rights and obligations, minimizes the risk of future disputes, and provides enforceable legal recourse if future disputes arise.

In New York, courts generally enforce detailed, voluntarily executed agreements, making formalization not merely prudent, but essential. By capturing every nuance in writing, you can ensure that negotiated solutions—whether buyouts, creative assets trades, or shared ownership arrangements—are fully executable and legally binding, protecting the financial and operational integrity of your real estate portfolio. It is helpful to work with real estate attorneys in crafting the language of any buyout agreements so that you are aware of tax implications and closing costs.

Final Thoughts

Preserving properties in a divorce is not about fighting harder—it is about negotiating smarter. Divorce does not have to mean losing your grip on high-value real estate. With the right legal strategy, meticulous documentation, and a team attuned to high-net-worth real estate concerns, you can protect the portfolio you have built and secure your financial future.

Atty K. Bruggemann is a partner in the Matrimonial & Family Law Practice at Gallet Dreyer & Berkey. Sydney B. Goldstein is an associate in the firm’s Matrimonial & Family Law Practice.