People often feel quite proud of home ownership. They may have worked hard to save enough money to afford a down payment. They may have invested a lot of time, effort and resources in repairing the property or modernizing it after their purchase. The equity they accrue in the home may significantly contribute to their overall personal wealth.
It is quite common for spouses to find themselves disagreeing about what happens with their house when they decide to divorce. They may find themselves facing lengthy negotiations and disputes over various issues related to their primary residence.
What disagreements related to a marital home frequently arise when couples divorce?
Determining who stays in the house
One of the first concerns people have to address as they prepare for divorce is who stays in the home and who leaves. Spouses may need to consider their custody arrangements and local support systems to determine who stays and who leaves during the divorce. Contrary to the misinformation people often share, moving out of the home does not automatically prevent one spouse from seeking their share of equity during property division proceedings. While moving out can be an emotional process, it is often necessary for those who need to move on after the end of a marriage.
Establishing a value for the home
Both spouses usually have a right to a certain portion of home equity even if only one spouse stays in the home during the divorce. Dividing home equity can be an important element of any divorce involving real property holdings. To reach a fair outcome, spouses have to agree on an appropriate value for the home. They may need to have an appraisal performed to determine what the house is currently worth on the open market.
Finding solutions to share home equity
Even after determining who stays in the home and what the home is worth, spouses may still find themselves disagreeing over how they share home equity. In some cases, one spouse wants liquid capital, which may require the other withdraws equity to compensate them. Other times, they may want to retain other marital property in return for giving up their possession of the home. Retirement accounts and investments can sometimes adequately offset one spouse’s share of home equity. People often find it difficult to agree on how they split equity, as their home may be worth far more than any other assets they share with one another.
People who approach major property division matters with realistic expectations are less likely to end up embroiled in a lengthy and frustrating dispute. Identifying issues that might cause conflict during divorce negotiations can be beneficial for both spouses.
