People who are going through a divorce have a lot of things to consider. For some, determining what to do with the marital home is a primary concern.
Because the marital home is often the largest asset that a couple owns, many individuals who are going through a divorce base the rest of their property division strategy on what happens with the home. It isn’t always easy to determine how to handle this asset, partly because of the emotional ties involved. Yet, there are a variety of options available.
Selling the marital home
One common option for handling a marital home during a divorce is to sell the property. This can provide a clean break for both parties, allowing them to divide the proceeds equally or according to the terms of the divorce agreement.
Selling the home often simplifies financial entanglements, as the proceeds can be used to pay off any remaining mortgage, with the remainder split between the spouses. This option can be particularly beneficial if neither spouse can afford to maintain the home on their own or if there is significant equity in the home.
One spouse buys out the other
Another option is for one spouse to buy out the other’s interest in the marital home. This arrangement allows one party to retain ownership and continue living in the home, which can be advantageous if they have children who benefit from the stability of staying in their current home and school district. The buying spouse typically refinances the mortgage in their name, which provides funds to pay the departing spouse their share of the equity.
Joint ownership after divorce
In some cases, divorcing couples may choose to retain joint ownership of the home for a period following the divorce. This option can be suitable if the housing market is unfavorable, making a sale less profitable or if the couple wants to minimize disruption for their children. This option requires clear agreements on responsibilities, such as who will pay the mortgage, property taxes and maintenance costs.
Clear terms in a property division agreement must spell out exactly what happens to the martial home. Once this is determined, it’s possible to move forward to addressing other, often less valuable, assets.
