Divorcing spouses often share concern over who gets to keep the house. This concern is understandable since a house can be one of the biggest assets a couple has. However, determining what will happen to the family home can be complicated.
One of the first sticking points may be the status of the house as marital, separate or comingled property. This can be an important distinction because marital assets are divided equitably in the divorce process, while separate property stays with the owner.
3 ways to divide a house
If your house is marital property, you and your spouse must determine what you want to do with it. If you cannot come to an agreement, a court may need to decide for you.
In general, there are three options:
- You and your spouse can sell the home and divide the proceeds between you
- One spouse can buy out the other spouse
- You and your spouse can continue to jointly own the home
Attempting to jointly own the home may seem tempting if you and your spouse have young children together, but it involves some obvious drawbacks. A situation that involves living together post-divorce can be ripe for conflict, which makes this option less common than the others.
The simplest option may be to sell the home and divide the proceeds. This allows you and your spouse to have a clean break and a fresh start. However, it may not be the most favorable option if you are not in a good position to find a new home.
What if you want to keep the house?
Another popular option involves one spouse keeping the home. In order to do this, you and your spouse would need to figure out the current value of the home and calculate a fair buyout price.
Sometimes, a spouse has enough separate assets to pay the buyout price. Other times, the spouse who wants to keep the house must give up other marital assets in favor of keeping the house.
Deciding to buy out your spouse should not be an impulsive decision. It is important to first consider the potential financial implications of this action. For example, you might consider if you can afford the buyout price and if you can afford the mortgage on your own.
There are several ways a house can be divided in divorce, but the best option for one family may not be appropriate for another. Because your situation is unique, it can be helpful to understand some of your options. That way, you will be better equipped to find the best solution for your situation.