Economic issues often dominate divorce proceedings. Not all spouses have children, but almost every marriage produces shared debts and assets. Couples who own a house together often worry about protecting their interest in the property.
How can spouses fairly or equitably address the home where they live together during divorce?
Allocating possession
Possession of the property refers to the ability to live there during and after a divorce. Unique details, such as whether the spouses share custody of minor children, may influence who ultimately stays in the home.
One spouse may agree to leave the home, or the spouses may need to ask the courts to resolve disputes about possession. Either way, at least one spouse must leave the home. In some cases, both spouses seek alternative housing and leave the marital home.
Negotiating the division of equity
Regardless of who stays in the home or if the spouses choose to sell it, they generally both have an interest in the equity they have accumulated in the property. Depending on the fair market value of the home and how much the spouses still owe on their mortgage, they could have hundreds of thousands of dollars in equity to divide.
Under equitable distribution rules, the spouse staying in the home may have to withdraw equity to compensate the other spouse. Otherwise, the spouses need to negotiate arrangements that factor in the amount of equity they accumulated during the marriage.
There are countless different solutions available, depending on the amount of equity and the other assets in the marital estate. Understanding the issues that spouses must address during property division proceedings can help people set and achieve specific divorce goals.