Divorce: What Happens to the Marital Residence?
If a divorce is on the horizon and spouses own real estate, the property will need to be divided. Each case is different and you should seek legal advice to guide you properly in your case. Generally, there are two options for dividing the martial residence (the property where you lived). First, one spouse can obtain a mortgage in their own name so that the other spouse is removed and relieved of liability on the mortgage. Once this occurs, the deed can be transferred into one spouse’s name. In some cases, the spouse who retains the marital residence will need to get a mortgage large enough to pay off the joint mortgage and pay the other spouse his or her share of equity in the property. The second option is to list the home for sale and divide the net proceeds in an agreed-upon fashion. The net proceeds are typically defined as what is left after payment of the mortgage, real estate taxes, insurance, real estate commissions, fees and any other liens.
The marital residence will need to be valued as well. This can be accomplished by a professional appraisal. Alternatively, the parties can research what similar properties in the neighborhood sold for and use an average to guide them toward an agreed-upon value. If the value of the home cannot be agreed upon, then a court will consider all evidence offered as to value and make a decision. If a spouse owned the home prior to the marriage, value to be divided would be the increased value from the date of the marriage through date of separation.
If you are considering a divorce and own real estate, please contact us for a confidential consultation.