If you own a home and are considering divorce, the question about what to do with what is likely your biggest asset could cause some serious concern. Especially if you and your spouse aren’t amicable at the time of separation, determining who lives where and what happens to the house is a tough decision. There is no perfect answer, and there is no magic wand to answer this inquiry. Whether you sell the home or not is a matter of cash flow, available assets, and cooperation of the parties.
Putting the marital property up for sale may be the easiest way to handle real estate. There are additional questions raised, however, regarding timing and allocation of net proceeds. In many divorce cases, selling the home might make the most sense. Especially if parties don’t get along, selling the home ensures potentially substantial equity division, which means both parties often walk away with cash in hand.
Whether the house is sold prior to, during, or after the divorce process is a matter of cooperation. If the parties agree and work well together, the home can be sold early in the process. This type of sale leads to fewer disputes during the lawsuit, cash on hand to make the transition easier, and fewer opportunities for in-person fighting. The downside – once sold, there’s no going back, which means no changing your mind if circumstances are different down the road.
Often, especially in cases of children, one party or the other may decide to try and keep the home even after the divorce is complete. This requires substantial cooperation of the other party as well. If this process is disputed, the parties may find themselves in Court to determine which spouse should remain living on the property pending final agreement. These types of Motions for Temporary Orders can be time intensive and expensive. In cases of substantial dispute, though, they become quite necessary to ensure civility during the divorce process.
To keep the home means to give up other community assets in exchange for the other parties’ net equity. Perhaps this means allowing the other spouse to keep an entire retirement account along with most of the liquid capital. If there aren’t substantial assets available to buy out the second share of the community home equity, then the purchasing spouse must often perform a cash out refinance to liquidate equity to pay the other party directly. Unfortunately, even in cases where one party wants to keep the home, if there are insufficient assets and credit to buy out the other share, the house ends up sold regardless.
You may enter a divorce process believing you want to keep or sell the marital home but understanding the requirements and consequences may lead to a different outcome altogether. Knowing your rights and responsibilities while separating are important to ensure your assets are protected. Speaking with an experienced divorce attorney is the first step to properly dividing your real estate. The knowledgeable team at the law offices of Magnuson Lowell PS are ready to help you in your divorce. Call today for a free case evaluation.