Getting a divorce impacts all aspects of your life, including your home. If you owned a home with your former spouse, figuring out who stays, who goes, and whether to sell the home altogether can complicate an already complex process. There are several laws and factors to think about while coming to a decision over the marital home, but asking yourself these questions and reviewing the answers with a knowledgeable divorce attorney can save you the stress.
1. Are your mortgage payments affordable?
Divorce can take a serious toll on your finances. To recover from the financial repercussions and keep yourself stable, you will likely need to adjust your spending. This includes minimizing your housing payment, which is why many people opt to list the marital home rather than staying.
Now, this doesn’t mean that holding onto the property is the wrong move. However, you really need to think things through and go over your budget and expenses before making a final decision. You may find that the costs of renting or buying a new home are much higher than your current housing expenses, in which case staying in place may make more financial sense.
2. Is the local housing market profitable?
Selling your home can reduce your monthly expenses. If the home sale is profitable, this can also help in freeing up extra funds to offset the costs of your divorce. To calculate the potential profit for your property, you will need to factor in any expenses that could come up while selling the home. The cost of home repairs, updates, staging, and real estate fees can reduce the amount you end up with after your home is sold, so keep these in mind.
You can also take a look at current local housing prices to get a better idea of your potential profits. This will help you decide whether selling now or waiting until the housing market picks up is a better move. If homes are selling below the asking price or are sitting on the market for months, you may want to put your sale off. As long as everyone is agreeable, that is.
3. Do you live in a community property state?
Depending on which state your home is located in, you may also need to think about how you will split the profits from your home sale. In community property states like Texas and California, financial assets are split evenly during a divorce. So if you are selling your marital home in these states and you acquired the property during your marriage, you are likely to receive only half of any proceeds from the sale.
This is why most legal experts recommend drafting and signing a prenuptial agreement that outlines how assets will be divided, even in cases of little wealth. With a prenup, you can predetermine who gets to keep the home and how any proceeds from a sale will be divided during a divorce, which can be useful if you are covering the mortgage costs.
4. Is the divorce or division of assets contested?
Deciding whether to keep or sell the marital home can become trickier when the divorce is heated or contested. That’s because consent is required from both parties before the home can be listed or sold. In fact, most marital assets are frozen as soon as either person files for divorce, so this can further delay any final decisions.
Once this freeze on assets has been lifted, you may need to file a lawsuit in order to force your ex-partner to allow you to sell or keep the home. In complicated situations like this, it’s wise to seek the counsel of an experienced real estate attorney in addition to working with the attorney who is handling your actual divorce.
5. Do you have minor children involved in the divorce?
If you have children with your soon-to-be-ex, you need to factor them into how you decide to handle your marital home. For example, if your children are under the age of 18 and are still attending school, having one parent keep the home may make sense to avoid disrupting their routine. Otherwise, your kids could end up having to switch schools, especially if you cannot find a more suitable property in the same school district. This could take more of an emotional toll on your children.
Consider speaking with a counselor if you need help making your decision. In fact, it may be a good idea to have your children meet with a family therapist, regardless of if you have plans on moving or not. Doing so will give them the extra support needed to cope with the confusing emotions that can pop up during a divorce, especially if it is a messy split.
6. Was the property used as collateral for a business?
Failing to separate your personal and business finances during a marriage can also complicate how real estate holdings are handled. If you used your home as collateral to take out a loan for your small business, for example, you may be forced to give up the property in order to maintain complete control over your company.
This is another scenario in which where you live can determine how your home, property, and other assets are divided. In community property states, your business assets may need to be split evenly, as well, so keep this point in mind. Your business and home may also be affected if your spouse played a role in your company, even if you do not live in a state with community property laws in place.
Work with an Experienced Attorney
Determining what to do with your marital home can be a complicated and emotional process, but the final decision really should make sense for your finances. So think things through and seek the advice of professionals like family law and real estate attorneys, as well as family counselors, before making the big, life-changing decisions.
Book a consultation with the real estate and divorce attorneys at Allen Gabe Law, P.C. by calling (847) 241-5000, Ext 121 or filling out a form today.