From a financial and an emotional standpoint, the family home is the most significant asset. Furthermore, the mortgage obligation which is attached to the family home is almost always the most substantial debt of the family.
In the event of a divorce, the house is considered a primary concern of either one party or both parties. The decision whether to keep or sell the family home can become a heated, emotional power struggle and an ongoing source of conflict between both parties.
The following are the choices you can make when deciding what to do with the family home during divorce:
- Sell it. Selling the family home will provide you and your spouse with a clean break from this jointly-held asset. Proceeds from the sale can be divided in the proper manner, along with other assets in the marital estate, which enables you to choose a home which is more suitable for your new financial situation.
- Choose which one spouse keeps the home. Remember, maintaining the costs of a home on one salary can be a difficult feat. However, if it makes financial sense for one of you to keep the house, then you must look at all the options. The person who is keeping it will essentially be purchasing the second half of the home from the other party. This situation should be handled like any other real estate venture, such as obtaining an appraisal and home inspection, as well as taking care of any potential major repairs. While the surrendering spouse can be removed from the deed through a “quit claim,” he or she cannot be removed from any mortgage containing both parties’ names in the same manner. Only a refinance by the spouse keeping the house will relieve the other of debt responsibility.
- Sell it at a later time. If selling the house later is mutually beneficial for both parties – especially when the market improves – then there are a few options. One is to rent the house to a third party and make it a profitable business endeavor. You and your spouse must establish a joint business banking account for rent receipts and from which to pay landlord expenses. The other option is that one spouse will remain in the home as a tenant, while both parties function as landlords. The tenant party pays rent at a fair market value to the joint business account, and all landlord-related expenses are paid from that account.
In order to determine which option is best for your specific divorce situation, contact our Long Island divorce lawyers at Hedayati Law Group, P.C. today.