The marital home is probably the biggest asset that parties have been a divorce. In many cases, the marital home has most of the equity in the marriage. The marital home can be divided several different ways. The most common way and probably the easiest way is for the property to be sold and the equity to be divided in some fashion. Now typically, the status quo will remain in terms of who makes the mortgage payments, the tax payments, the insurance and the utilities until such a time that it’s sold.
Sometimes there’s a disagreement over what the selling price should be. What the courts will do in many cases is take an average of three brokers’ opinions and put it on the market for that price. In some cases, some clients may say that we are not asking enough and we are trying to sell it too quickly and I’m not getting my full equity because we’re trying to move the property in a liquidation fashion. The most common way to distribute who gets the house is to actually list the property and divide the equity.
In other cases, you can have a buyout situation where one party is going to remain in the property and the other party is going to release his or her interest in exchange for a fair share of the equity. In those cases, we typically take three appraisals or market evaluations and we take the average of those three to determine how much the value of the property is. We then look at how much is owed on the property and we determine how much equity there is. We then determine how much equity the person deeding their interest will receive in exchange for such deed. In many cases, the person who is going to remain in the property to be required to refinance the debt into his or her own name to remove the non-owner from any liability.
Another way to divide the property is to allow someone to remain in the property for example for several years until the minor children become emancipated and then put the property on the market or do a buyout. The tricky thing with leaving someone in the house and transferring the ownership at a later date is to determine when and how the equity is going to be determined. Is it going to be determined at the time of the divorce or is it going to be determined at the time of the actual transfer or buyout? This could be a huge difference when we are talking about minor children that are going to remain on the property for four, five, and 10 maybe even 15 years before the house is sold. This is something that the attorneys will negotiate along with the parties to determine what the proper amount of equity is and how it should be divided and when it should be divided.