Dividing assets can often be a very complex undertaking when couples get divorced. It can also be a contentious process, especially when it comes to major assets like a family home. If both spouses have claims to the value of the home, how can they divide that value? What if they both have different goals, such as one person wanting to keep the house and the other person wanting to sell it?
There are many different details that have to be considered. It all starts with understanding the general options that spouses have when they get divorced. The three primary options for handling the issue of a family home are discussed below. Understanding them during a divorce can make the asset division process less complicated
A buyout by one spouse
When one spouse desires to retain the home while the other does not, the one with an interest in owning it moving forward may choose to buy out their spouse’s share. This approach often involves securing a refinanced mortgage and negotiating with their spouse by offering other assets in exchange for sole ownership of the house. The new mortgage is necessary because the spouse who is giving up their share shouldn’t be held responsible if the other person misses payments in the future.
Sell the home
Many couples opt to sell their marital home to a third party. Even though it may have been their family home, both parties may wish to move forward separately and/or can no longer afford their current residence. This approach simplifies asset division by converting the property into liquid assets that can be fairly divided. There are potential drawbacks, though, such as the expense of both people purchasing new homes after the divorce.
Some couples decide to continue co-owning their home even after their divorce. They may do this with the intention of selling the property at a later date when market conditions are more favorable and they can make more money. Alternatively, they may maintain the home for the benefit of their children – for instance, allowing them to live there until they finish high school.
While these are the three main options, it’s important to recognize that each divorce situation is unique and that these are not the only solutions available to couples struggling to decide how to manage their marital estate. Seeking personalized legal guidance can help to ensure that every divorcing couple reaches a fair solution that meets their needs to the greatest possible extent.