Splitting up property with your spouse during a divorce gets more difficult as the assets become more expensive. For many couples, the home that they live in will be a major source of contention.
A surprising number of people seem to think that they can get both sole ownership and possession of the marital home in a divorce. However, equitable distribution rules in Florida typically mean a couple will have to share the home’s equity. There are many ways for couples to address the house, most of which involve one of the three options below.
1) One spouse keeps the house and the other gets equity
Arguably the most common approach to the marital home involves one spouse assuming possession and ownership. They will typically need to execute a deed to remove their ex from the title. They will also need to refinance the mortgage solely in their name so that they can offer cash to their ex for their share of the equity.
2) The couple agrees to sell the home and split the proceeds
In cases where neither spouse wants to stay in the home or where neither can afford financing on their own, selling the home may be the best solution. Each spouse receives a portion of the sale proceeds, helping set them up for financial independence. A judge can also order a divorcing couple to sell their home as part of the property ruling.
3) The couple agrees to continue joint ownership
Arguably the least common solution, continued co-ownership can benefit people in specific scenarios. Parents who want to try birdnesting to make divorce easier on their children may decide to remain co-owners until their children achieve independence.
Those who are underwater on their mortgages may agree to joint ownership until they can sell the property or rent it to someone to generate a stream of revenue. Contracts are often necessary to ensure that each spouse retains their claim to the property and understands their obligations under the joint ownership arrangement.
Understanding the different ways to address your home and other property in an upcoming divorce will help you plan for the future.