Dispostion of the family home frequently causes problems in a divorce. Custodial parents may want to hang onto the home for the sake of the children. Perhaps one or both spouses can't afford to purchase a similar replacement home. Much depends upon the amount of equity in the home and the ability of each spouse to keep it.
The following is information to get you started on the road of evaluating your divorce decision about your real estate.
For most couples the family home is the highest valued asset they will have to divide in their divorce. Its division is usually fraught with controversy for varying reasons. It may be difficult to value, is not readily converted to cash, costs a substantial amount of money to maintain and has implications of federal and state tax liability. As if all those things were not enough, your family's emotional attachment to your real estate, in particular a family or vacation home, can cause you to make an irrational or poor decision at the time of the divorce. Your family may be haunted by that decision for years after your divorce.
Some questions that you need to answer are:
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Should you sell the family home?
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Do you keep it until the children are grown?
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Should you keep the home and buyout your soon to be ex-spouse, or vice versa?
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Can either of you afford to keep it after the divorce?
The answers to these questions and others can help you avoid or plan for problems associated with your real estate. Historically, the family home is the asset that most often causes controversy both before and after a divorce.
The principal reason for this problem is the timing of the sale of the home and the division of the net proceeds. Both events frequently occur some time after the divorce. In addition, couples seldom plan as they should for the payment of household maintenance and upkeep during the pendency of the divorce. At first glance the family home appears to be the easiest asset to identify and describe. For purposes of a divorce, the description of your ownership interest in your home and other real estate can be very complicated with pitfalls for the unwary. As with the division of personal property, the rules and laws regarding the division of real estate vary from state to state. Consult with your lawyer about your rights and responsibilities after you have read this section and put together your worksheets.
Before you see your lawyer, gather the necessary documents and records about each piece of real estate. Get the documents not only for the property titled in your name, but for all the property in which you or your spouse has an ownership interest. This includes property that you own in either of your names alone, jointly with another person or property owned by a trust or business in which either of you have an interest.
More Pertinent Information:
Key Factors About Your Real Estate
History and Types of Ownership
FAQs