A major bone of contention among divorcing couples is the division of the family residence. This is understandable given that couples invest considerable time, effort and money in creating a dwelling place. Unfortunately, divorce causes change and one of the biggest changes is the loss of the family residence. Due to this unforeseen circumstance, you may be required to "downgrade" to a smaller place or may be required to rent instead of own a new home. A divorce may also force you to move to a less desirable neighborhood and potentially a neighborhood away from family, friends and your children's school.
So what options do you have when you and your ex-spouse are set to divorce and there is a family residence to divide? Here are a few options to consider:
1. Sell the Family Residence: One option that divorcing couples opt for is to sell the family residence. Proceeds from the sale of the residence are then split between you and your ex-spouse. If the family residence is set for sale, you and your ex may be required to hire a real estate professional to appraise the value of the residence, especially if you both cannot agree to the listing price of the residence. You and your ex-spouse will also need to agree on the realtor to sell your home and the provisions related to the sale. For example, who is responsible to show the home after it is listed? Who is responsible for mortgage payments and other expenses until the home is sold? It is a good idea for you and your ex-spouse to sit down and discuss sale provisions and figure out a rough timeline for the listing and sale of the family residence.
2. Buy-Out: Another option to consider, if you have the ability and the funds, is to buy-out your ex-spouse's interest in the family residence. If you choose this option, talk to your family law attorney in your state and place provisions in your written agreement about the buy-out. Buy-out provisions may include a timeline for the refinance of the residence and an outline on what will happen if the receiving spouse fails to refinance in a timely fashion or is unwilling to pay the mortgage. It is also a good idea to include in your written agreement, provisions related to title transfer of the family residence to the receiving spouse.
3. Stay in the Home Pending Sale/Transfer: Many divorcing couples stay in the family residence and live together pending the finalization of the divorce. While this might make sense for some families, it also creates an environment of stress and tension, not only for the divorcing couple, but also for the children. What happens when you or your ex-spouse date other people? Will you and your ex-spouse continue to eat together with your children as a family unit? Who will be responsible for chores around the house? How will you share custody and visitation with your children if you're still living under the same roof? One New Yorker made headlines last year when she shared her story about her divorce and the dispute over the marital residence. Pending the sale of the marital residence, this New Yorker continued to live in the marital residence with her current husband and her ex-husband and their children. Did I mention this New Yorker was also expecting a baby with her new husband? Before you choose this option, it's important to have a plan and discuss this with your ex-spouse so boundaries are established and communication tools are in place if conflict occurs. Having a plan will eliminate any tension that may occur when living in close quarters.
Discuss these options with your ex-spouse, along with your family law attorney. Your family law attorney can give you more detail on what options are best suited for you and your unique circumstances. While it may be uncomfortable and upsetting to divide an important asset such as the family residence, this may also be an opportunity to start fresh and create a new home for you and your family.