Divorcing spouses need to work out arrangements for their economic separation. They must divide both their property and their debts.
The home where spouses live together may be their most valuable joint asset and may also be the collateral for their most significant shared debt. During a divorce, there are several challenging issues related to one’s marital home that spouses must consider carefully to reach a fair property division settlement.
Which spouse stays in the home?
Possession of the marital home can be a source of conflict. In scenarios where both spouses want to stay in the home, a careful evaluation of family circumstances and personal capabilities may be necessary. The physical ability to maintain the home, the financial capability to afford the mortgage and the possible need for stability for minor children can influence possession.
What is the home worth?
Reaching appropriate solutions for high-value assets first requires an agreement on the value of those assets. Spouses may need to hire appraisers to determine what their homes are worth for the purpose of fairly dividing their value.
How do spouses share equity?
The simplest way to share equity is through selling the home or refinancing. If they sell, spouses can share sale proceeds in a specific fashion. If one spouse refinances, they can withdraw equity to compensate the other for their interest in the home. Otherwise, spouses must reach an arrangement that uses other marital assets and possibly marital debts to offset the equity in the home.
Those preparing for complex property division discussions during a divorce may need guidance to understand the law and explore different solutions. Working with a divorce attorney can help those with valuable property pursue a fair outcome when dividing their assets and financial obligations during a divorce.