Heading into your divorce, you’re going to need a strong strategy for addressing the property division process that awaits you.
Don’t be like others who put forth a lackluster effort feeling like they can negotiate on the fly. Taking this path is almost guaranteed to leave you facing a less-than-desirable financial outcome, which will put you at a significant disadvantage as you head into your post-divorce life.
Is your home considered marital property in your divorce?
One of the challenges that you’re bound to face in the property division process revolves around the family home. Before you start thinking about what to do with the residence, you’ll want to first assess whether the home will be considered marital property during your divorce proceedings. To make that determination, you’ll want to consider the following:
- When the home was purchased
- The purpose for which the home was used
- If the home was an income property, how that income was used
- How long you’ve lived in the home with your spouse
- Contributions and improvements that you’ve made to the home
Although most homes will be deemed marital property, there can be some gray area here. So, make sure you have a clear understanding of how your home will be considered during your divorce.
How to address the family residence in your divorce
If it turns out that the residence in question is a marital asset, then you’ll have to figure out what to do with it. Here are your options:
- Fight for the home: A lot of people want to keep the family home once their divorce is finalized. This could be for sentimental reasons, especially if you raised your children in the house, but the desire to retain the home could also stem from the amount of equity built into it. After all, the family home may be the largest asset in your divorce.
But if you want to keep the family home, then you’ll have to be prepared to pay for it, either with cash or by giving up other marital assets. Also, before you go this route, carefully consider whether you can cover existing mortgage payments and upkeep costs on you own. Creating a post-divorce budget can help you here.
- Sell the home: Another common option is to pass on keeping the residence. You might be able to use the home as leverage during the divorce process to get other marital assets that you want, or you may be able to talk your spouse into buying you out. If neither you nor your spouse want the home, then you can sell it and divide the proceeds fairly. Just make sure that the amount of compensation that you receive for your portion of the house is justified.
- Consider joint ownership: Although it’s not a common option, you can continue to co-own the home with your spouse, even after divorce. This is a way to continue to build equity and wealth, but there’s also the potential for management and communication issues.
Which option is right for you in your divorce?
That really depends on the circumstances and what you want for your future. As you consider your options, carefully think through what you want your post-divorce life to look like and what it’ll take to get there. By having realistic expectations and being honest with yourself about your income and the costs that you’ll face post-divorce, you’ll be more capable to make the right decision.
We know that navigating divorce and property division is difficult, especially given the emotional ramifications of your marriage dissolution. But adequate preparation can help ease the stress. Thus, now is the time to start plotting the course that will lead to the post-divorce life that you want.