In divorce cases, among other things, the court is tasked with dividing the property of the spouses. Or, ideally, the parties mediate their divorce out of court and must find a way to divide the property. This division, in or out of court, can include real estate such as the marital house. There are a number of ways to approach this situation.
The attorneys at Christensen Law are divorce attorneys practicing in Salt Lake City and other nearby Utah cities. Below, they discuss potential solutions for the division of a marital home. The discussion is generic. Your situation is unique, and you should consider consulting with an attorney to receive advice specific to your situation. Moreover, there are many more available options than are discussed below.
Option 1: One spouse receives the house, and the other receives other assets of equal value.
Or, the spouse receiving the house arranges to purchase from the other spouse.
On the surface, this option sounds easy. And, sometimes, depending on the case, it is as easy as it sounds. One spouse takes the house. The other is compensated for their half with money or other assets from the marital estate. Alternatively, the spouse receiving the house finds a way to pay off the other spouse. This might be done through refinancing.
However, the home is often the largest assets of the parties. There may not be enough value in other assets to make it possible to achieve such a split. Or, it is too much of a stretch. The spouse receiving the house may be left with no liquid assets. In such a situation, the spouse could be at high risk for foreclosure.
Refinancing can also be tricky. The lender will want to see that the spouse receiving the house will have the ability to make payments.
Option 2: The house is sold as soon as possible and the proceeds divided.
This is one way to make a clean break for the parties and eliminate a mortgage. It also frees up the equity for expenses and changes caused by the divorce. For at least one of the spouses and maybe both, it might be a distasteful option. People are often emotionally attached to their homes. Moreover, parents often want to avoid uprooting their children. However, from a practical standpoint, it is an option that should be strongly considered.
The difficulty might be found in actually selling the house. The parties may dispute about which realtor, what price, and other concerns.
Option 3: The house is sold at a later date.
Sometimes it is clear that the home must be sold eventually, but the parties wish to delay. For example, the parents might want to wait for the children to graduate school or reach a good time to move. In this situation, the parties agree or the court orders the house to be sold sometime in the future.
This might work for the parties to the divorce. But, there can be downfalls. With the house in limbo, the divorced parties will have difficulty making a clean break. They will have to interact. The party not in possession of the house will have worry about what the other is doing to the house. Further court proceedings may be necessary. However, the delay could prove profitable if the market goes up or if the parties are able to wait for the optimal buyer.