Perhaps the most common arrangement when dividing a marital home after divorce is for the couple to simply sell the house and split the money they earn from selling it. This is fast and easy, and provides cash to the parties to start over – perhaps in another home for themselves.
In other situations, one parent keeps the house, and they refinance or otherwise buy out the other person’s interest in the home. A less common result is where the parents decide to jointly own the house together after the divorce.
Providing stability for the children
But, why would anyone continue to jointly own a home with their ex after divorce? Reasons vary, but the most common reason is to keep the children in the same home and, as a result, keep them in the same school attendance zone. This allows children to continue in the schools they have been enrolled in and, in the case of older teens, allows them to finish high school where they started. This keeps the kids from being uprooted and allows the children to stay close to their friends and all that is familiar to them. Keeping their same school, friends, extracurricular activities, living spaces and bedrooms can go a long way in providing children a feeling of stability.
Maximizing the real estate value
Given today’s housing market, the parties may also be trying to capitalize on the ever-increasing value of real estate. Or, if real estate in their area is in a slump, they very likely will want to hold off selling until there is a more favorable market. When they decide to keep the home, they also have to decide which parent, if any, will continue living in the home, whether that person is entitled to recapture the mortgage payment or some portion of it out of the net sale proceeds or if they will rent the home out to a 3rd party.
Regardless of whether it is rented or one of the parties lives in the home post-divorce, there will be details to work out regarding how the cost of repairs and net income, taxes and tax deductions for interest and property tax, will be accounted for and/or divided between the parties.
Home are often the largest asset in a couple’s portfolio and that warrants a very close look at options on how to fairly address the division of that asset.