The property division process during divorce can help divorcing couples divide all different types of property and assets they may own together. One significant example is how to split the family home when the time to divide property during the divorce has come. There are generally three different options for splitting a home during divorce.
Sell the house and split the proceeds
This option is typically the cleanest and simplest way to split the couple’s equity in a home. Once the home has been sold, the mortgage debt is paid along with any taxes and expenses associated with the sale and the divorcing couple can divide the remaining funds between them.
One of the former spouses keeps the house
If the couple agrees for one of the spouses to keep the house, they will need to refinance it. By refinancing, the spouse who will no longer have an interest in the home will be removed from the mortgage; a new mortgage loan with only the spouse who will keep the house will replace the old one that both spouses were included on; and funds can be freed up to buy out the interest of the spouse who will not be keeping any interest in the house.
Both spouses keep the house
This can be the most challenging option for many divorcing spouses. Reasons why both spouses may need to keep the home can include that the house is worth less than they owe, they cannot afford separate homes or the spouses agree that one of them will remain in the home until minor children are grown. If it is not the right time to divide the home, both spouses may decide to keep the home for the time being and will need to work out an agreement to accommodate that arrangement.
Property division can be a challenging process and because each situation is unique, it is helpful to be familiar with different options to help in different situations. The more divorcing couples are prepared for the property division challenges they face, the better position they are in to navigate those difficult waters.