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Kim Owns the Land but Kanye Owns the House: When Property Division Gets Messy

Superstardom comes with plenty of benefits, but it also brings some unique complications. For example, former powerhouse pop couple Kanye West and Kim Kardashian lived the type of life unheard of outside reality TV shows.

As a couple, West and Kardashian acquired several multi-million dollar homes, built a collection of supercars, and grew the brands that helped make them famous. For several years, they seemed like an excellent example of how two superstars combining households can lead to incredible wealth and success. Now that the Kardashian-West marriage is ending, however, it’s becoming clear that dividing up assets becomes exponentially more challenging as their value increases.

For example, one crucial point of contention that seems to have come up is ownership of the couple’s family home in Calabasas. Controlling ownership of a home is a common struggle in divorces of all types, but West and Kardashian have a unique battle: sources state that Kardashian owns the land the house is built upon, but West owns the house itself. While there are no official ownership documents available, if this is true, dividing up the home in the divorce will be tricky for both parties.

Dividing the Family Home

Depending on the couple, high-asset marriages can involve a wide variety of property ownership strategies. Some couples allow everything to fall under marital property, so they have complete joint ownership over everything they acquire during the marriage. Other pairs keep things entirely separate, using a prenuptial agreement to outline who will own what in advance.

Some spouses fall in the middle – some property is jointly owned, some is not, and some stuff falls under unique contracts put together while they are married. Current reports appear to place Kim and Kanye in this group. That’s how their home may have wound up in this unique, split-ownership scenario.

There are several reasons why one party might own the land while the other holds the home, but two stand out:

Land Lease

A land lease, or ground lease, is a type of agreement that retailers and other commercial businesses often use to build new locations. With a land lease, the person who owns the land gets to keep ownership. However, they allow someone else to build on their land in exchange for rent. The person or business who builds on the land has full ownership over the building, but not over the land itself. To keep using the building, they need to continue paying rent to the landlord.

The arrangement allows retailers to quickly build new locations without the stress and investment of buying land, but that’s less appealing for private residences. Land leases aren’t common in private property for several reasons.

First, people expect to use their homes for much longer than many retailers plan to retain a single location. In a land lease, the landlord can sell the land to a third party at any time, who may have different intentions for the land. This puts homeowners at risk of complicated contract disputes to stay in their home, while retailers can simply move to another location.

Second, landlords in land leases can build whatever they want on the rest of their property. This isn’t ideal for homeowners who prefer privacy and stability. It’s unlikely that West and Kardashian have this type of arrangement, but it’s not impossible, especially if they were trying to keep their assets separate when the home was built.

Living Trusts and Life Estates

The other alternative for the confusing split is if the property itself is in a trust. Many high-asset individuals and couples set up living trusts for their real estate to protect their privacy. These trusts are entities that own the property, but they are run for the trustee’s benefit – generally, the person who lives on the property.

Living trusts can be set up in conjunction with life estates. A life estate is a type of joint ownership. In a life estate, two people have ownership over the property, but only one person has possession at a time. The life tenant gets to live in and possess the house during their lifetime, while the other party will receive full ownership after the life tenant’s death.

How might this lead to split ownership? Simple – sort of. Kardashian and West could have a trust set up on the property, but West has a life estate on the house. If Kardashian is the primary trustee of the property trust, but West is the life tenant of the house, then they have found themselves in a tricky legal scenario where they both have strong claims.

Other Property in the Kardashian-West Divorce

Of course, Kardashian and West are splitting far more than just this one home. Current sources state that Kardashian is requesting that West cede his claim on the family home for their children’s sake. To convince him, she may offer him assets he’d prefer to own, such as full ownership of their six-million-dollar, two-acre plot of undeveloped land in La Quinta, their Wyoming ranch, or their fleet of supercars.

These potential offerings rely on California law: marital assets must be split 50/50 since the state considers all marital property to be community property. If West wants to keep more of the cars bought with communal funds, then he’ll need to trade for something of equal value, like the house. The pair’s current negotiations are not public, but it’s easy to see that their divorce is anything but Yeezy-peasy.

Star-Level Divorces Require Star-Level Help

No matter how the actual ownership of the family home is divided, West and Kardashian’s divorce shows precisely how complicated the process can get. High-asset divorces take work and expertise to manage, particularly if the couple wants things completed quickly. That’s why it’s worth working with expert attorneys with a background in family law and finance. If you’re considering divorce and want to discuss your options, reach out today to learn more about splitting from your spouse without the stress.