A home can mean many things for a family: shelter, an investment, a place to raise children, and even a workplace. If you and your spouse decide to separate, it can also be a source of conflict if you cannot agree on what to do with your home. Is it possible to maintain home ownership after your marriage ends?
How might you keep your home?
If your home is determined to be marital property, then it will be divided between you and your spouse along with other marital assets, such as bank accounts and retirement assets, according to what is fair or equitable. This means that keeping your home may depend upon giving up other property of a similar value or buying out your spouse’s equity in the home to reach a fair arrangement. For example, you might choose to give your spouse a greater portion of investments, retirement, or other assets to equalize their share of the equity in the home. Or, in many situations, the parties would agree upon the fair market value of the home – sometimes with the assistance of a professional appraiser – and then the spouse who is keeping the home would refinance the existing mortgage, remove the other spouse’s name from the mortgage if necessary, and would pull out enough cash from the refinance to give to the other spouse to compensate them for their share of the equity in the home.
In some situations, it may be possible to move forward as co-owners of the home. If either or both parties cannot currently afford to buy out the other’s share of equity in the home or to refinance their mortgage, for example, temporarily maintaining co-ownership may allow them to finalize their divorce while giving more time to allow one or the other spouse to refinance. In other cases, parents may choose to pursue “nesting” by keeping their child in their home and rotating which parent lives in the home with the child according to their parenting plan.
What if keeping your home doesn’t make financial sense?
In some cases, selling your home and dividing the proceeds is the best way to provide you with the funds you need as you enter the next chapter of your life. While moving forward without the family home may seem challenging, sometimes it is the best financial decision.
Whether or not you want to keep your home after you and your spouse separate, our team at Beattie Onorato can help create a strategy that best supports your goals and meets your financial needs.