Divorce: What About The House?

by | Dec 15, 2023

One of the most important decisions in a divorce is how to handle the house. For many couples this is the biggest asset in their family’s estate.  But before any decisions can be made it is important to gather a significant amount of background information.  This includes details about home ownership, the current mortgage, and gathering essential documents such as deeds, promissory notes, mortgage statements, and even property and casualty insurance declarations pages.

6 Steps to Help Make Decisions About the House

  1. Valuing the property is a critical step. This could involve getting realtors to conduct a Comparative Market Analysis (CMA) or obtaining a formal appraisal, the latter usually involving a cost.
  2. Analyzing monthly expenses associated with maintaining the house is essential to understand ongoing costs.
  3. Inquiring if it is important to remain in the same school district for your children.
  4. Finding out the source of the initial funds used for purchasing the house. There may be some non-marital assets and are not subject to division.
  5. What is the total cost basis of the property?
  6. What are the potential tax considerations like capital gains tax?

Each detail contributes to creating the comprehensive picture that is necessary for exploring available options for you, your spouse, and your family. This information informs decision-making by providing a clear overview of the situation, including the financial feasibility of one of you keeping the house and other scenarios such as sharing expenses for a period of time after the divorce is finalized.

I find it is beneficial to compile a written history of significant events during the marriage, including property transactions, employment changes, etc. Visualizing the current situation helps to comprehend the reality of things, especially when evaluating desires like keeping the house or staying in specific school districts. This process prompts crucial questions such as, “Is this financially doable for us?” and assists in framing discussions around available options, including whether selling your home and splitting the profits is more suitable.

Understanding all these aspects is fundamental in order to make informed decisions rather than opting for choices without a solid understanding of the financial implications.

The Collaborative Divorce process is an excellent platform for these conversations. It allows for the free sharing of information between you and your spouse, without the need for repeated requests or subpoenas as often happens in a litigated divorce. This transparency creates open discussions and fosters considerations of previously unexplored options.  Decisions might range from living together in the house for a certain period to the more complex choices like buying out the other party. Further discussions may delve into possibilities like renting out the property, sharing expenses, and splitting rental income.

In addition to a divorce financial planner (https://institutedfa.com/), involving a mortgage  professional or a Certified Divorce Lending Professional (CDLP) is invaluable. Their perspectives and expertise, especially concerning mortgage-related matters, are crucial in this process. The Divorce Lending Association website is a resource for finding CDLPs nearby.

Ultimately, decisions about the house are weighty and have long-term financial implications for families. The Collaborative Divorce approach involving specialized professionals helps to navigate these complexities and arriving at informed, thoughtful decisions about the family home.

For more information or to schedule a consultation call (850) 252-6325.

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