The more valuable an asset is, the more spouses may fight over it when they decide to divorce. For many couples, the marital home is the biggest investment they made together and the biggest point of contention when they divorce.
People may find themselves disagreeing about what the home is worth and who gets to stay there during the divorce. They may also fight over who ultimately retains the home after the divorce. Generally speaking, there are three main solutions that people may decide upon when addressing the marital home during a divorce.
How do people address the marital home in a fair manner during divorce?
1. Maintaining joint ownership
Continued joint ownership is the least common solution for the marital home when couples divorce. Typically, such arrangements only occur when spouses reach an agreement to continue owning the home together. They may do so either for financial reasons or for child custody purposes.
Couples may have repairs that they need to perform before listing the home for sale. They may also want to wait until the market changes so that they can secure a higher return on their investments. Some families attempt a birdnesting custody arrangement where the parents live elsewhere and the children stay in the marital home until they turn 18 and move out on their own.
2. Selling the home
Frequently, couples agree to list the home where they lived together for sale after they divorce. They can then divide the proceeds of the sale in a specific way.
Selling the home is a reasonable option in cases where neither spouse can afford the home on their own or where both spouses intend to move while rebuilding their lives. Agreeing to list the home is usually the fastest way to extract and split equity in a reasonable manner.
3. Arranging for sole ownership
Factors including income, credit scores and custody arrangements can influence which spouse retains the marital home. Spouses can sometimes reach an agreement through direct negotiations that lead to one spouse keeping the home.
Other times, a judge may allocate the home to one spouse as part of a litigated property division case. In such scenarios, the spouse staying in the home often has to refinance. They can possibly withdraw equity to compensate the other spouse. Other times, the spouse giving up the marital home receives other valuable marital property to balance out asset distribution.
People setting goals for an upcoming divorce often have to consider the various solutions for high-value marital property. Knowing the three options for addressing the shared marital home can help people pursue the best arrangements given their circumstances.