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3 different approaches to dividing the family home in a divorce

You and your spouse have likely spent years putting your paychecks in the same checking account and making payments on the same mortgage. When you decide to divorce, you will have to separate your financial resources and obligations, which can be very challenging.

The home where you currently live may be your most valuable asset or at least the one that matters the most to you in the upcoming divorce. There is no black-and-white solution for the marital home in a divorce unless you have a pre-existing agreement with your spouse in a written contract.

Otherwise, you need to negotiate a solution with your ex or ask a judge to divide your property. What are the three most viable means of handling your home in a divorce?

One spouse keeps the house

The most common solution for real property in a divorce is to allow one person to retain possession of the property. They get to live there if they want or sell the property after the divorce. Despite what people think, such arrangements don’t mean that the person with possession keeps the house and the other gets nothing.

Typically, the courts will consider the total value of home equity that the couple has accrued during the marriage during property division and will expect the spouse keeping the home to refinance and share equity with the other. Even if you don’t withdraw equity from the home itself, you can expect that the spouse not keeping the home will have the right to an equivalent value in other marital property.

The spouses share the house

In what is most likely the least common solution, some spouses decide to continue owning the home jointly after their divorce. Such arrangements are common when people want to try a birdnesting custody arrangement. Birdnesting is very effective for young children and children with special needs who may not tolerate the instability caused by traveling between two homes.

Other times, when the real estate market is unfavorable, spouses may agree to continue owning the home jointly. They may rent it out or continue making repairs until they can recoup what they have already invested in the property.

The spouses sell the house

In scenarios where the mortgage is underwater or couples have very little equity, they may realize that selling the home and getting rid of the obligation to take care of it is the best solution. Other times, neither spouse wants to live in the marital home after the divorce. Selling the home can be a good solution as it provides financial resources for both spouses as they start rebuilding their lives.

Thinking about solutions for your most valuable property will take some of the stress out of property division negotiations in your divorce.

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