You have spent a life together but unfortunately, you both know it is time to call it quits and start the next phase of your life. Now the messy part starts. Who gets the home, the car, and the financial assets? Where will the children live during the divorce? Or after? Depending upon the state within which you reside dictates how the home is seen in the eyes of the law and to whom it is awarded.
For this example, we will assume the house is considered marital property; therefore, it must be distributed with other marital assets fairly during the divorce. Now, fair does not always mean equal, so keep that in mind. Other factors will come into play when deciding which spouse keeps the marital home.
When children are involved, everything becomes much more complex. For instance, if you are the father and have moved out during the divorce while the kids stayed in the home with the mother, it may be difficult to prove your “need” for the home when assets are distributed. The children will always take priority, so you may want to work out an arrangement where you do not actually leave the home until the proceedings are finalized.
If the court has ordered or the spouses agree to split the home evenly, there are several options to pursue:
• Co-Own the Home – when children are involved, this is often the best decision to make. The children are able to remain in the same home, keep the same friends, and attend the same schools, offering less disruption into their lives. Both parents are responsible for upkeep and maintenance costs, even though only one parent is actually residing in the home.
• Sell – if there are no children or you used the above agreement until the children have graduated, selling the home is another option. The remaining mortgage is paid off and the profit is then split evenly between ex husband and ex wife.
• Buyout – if one spouse decides they want to keep the home, they can be bought out by the other spouse. If the person wanting the home does not have enough cash flow to buy the home, they can refinance for the full value of the home with the equity being split per your agreement.
Keep in mind, that if one spouse keeps the home or buys out the other spouse, that spouse will still need to have their name removed from the mortgage or it will remain on the credit report. If there is a buyout requiring refinancing, the refinancing should be done only in the name of the spouse that is retaining the home. Otherwise, the spouse no longer having ties to the home must present the proper documentation to the mortgage holder. This is something your divorce attorney can assist you with when the time comes.