Determining what to do with the marital home can be one of the most challenging decisions in a divorce. Often, it is one of the most valuable assets a family has. People also tend to feel sentimental about their marital home because it can remind them of better times. A marital home may also be the only home children have known and may be a source of comfort and stability during an otherwise chaotic time.
Although there can be benefits to keeping the marital home, there can also be drawbacks. Recent divorcees are often startled to learn how difficult it can be to afford a mortgage payment and all the household bills on only one income. The cost of ongoing maintenance and unexpected repairs can also come as a surprise to someone who is used to splitting those expenses with another person.
Do you understand your options?
Understanding all your options can help you find the decision that is best for your situation. Generally, spouses choose one of three options.
You could buy out your spouse to get sole ownership of the marital house. You and your spouse could sell the marital home and divide the profits. Alternatively, you and your spouse could continue co-owning the house with the intention of selling it later. This last option can be a little more complicated that the previous two, but it may be a desirable option when kids are involved.
What might the court decide?
Court may consider any relevant factor when deciding how marital assets, like your home, will be divided. However, the court commonly considers the duration of the marriage, as well as each spouse’s:
- Age
- Income
- Employability
- Needs
- Contribution to the appreciation or depreciation or marital property
- Contributions as a homemaker
However, it is important to note that a court does not always need to be involved with dividing marital assets. If you and your spouse can work together to find a mutually agreeable solution, you may not need a court to decide for you. Also, you could have more creative options available to you.
What is the cost of a buyout?
If you decide you want to keep your marital home, be sure you have an accurate idea what the current market value is for your home. It is important that you can afford the buyout, as well as the cost of ongoing expenses, like mortgage payments, utility payments and repairs.
Then, you must figure out how to get the money together for the buyout. There are various ways to do this, such as selling off some of your separate assets, trying to borrow money from a bank or leaning on help from family or friends.
However, another way to become the sole owner of the marital house is directly through the division of assets. You and your spouse may divide your most valuable assets, so each person gets a combination of assets with roughly equal value.
Essentially, this means you would be trading other assets away, so you can buy out your spouse and become the sole owner of that property. In exchange for you keeping the house, your spouse may take the retirement accounts and the vacation property or some other combination of assets that is worth roughly the same amount as the marital home.
There are many factors that you must consider when determining what to do with your marital home. Every family has a different situation and different needs. It can be valuable to fully consider the possible advantages and disadvantages for all options, so you can choose the best option for your family.