When any Michigan couple divorces, they must divide their marital property according to state law. The marital property can encompass everything from household goods to retirement accounts, and some types of property are much more difficult to divide than others.
Ways of dividing a home during divorce
One of the primary considerations for many divorcing couples is how to divide the family home. There are several ways a family home may be divided during divorce and divorcing couples should be familiar with what those are to help them through their property division process. Some of the most common solutions are:
- Selling the home and splitting the proceeds of the sale. Selling a home can be a complicated process, but this is one of the simplest ways for a divorcing couple to divide the interest in the family home. Once the mortgage is paid, taxes are paid and other sale-related expenses are paid, the divorcing couple can split the remaining money.
- One spouse keeps the house. Another option is for one spouse to keep the home. The remaining spouse buys out the other spouse’s share in the home according to the terms of the property division settlement. To do this fairly, the parties may first need to get a professional to assess the home’s current market value. Once they have this dollar amount, they can work out a plan for one spouse to buy out the other’s share. The spouse keeping the home will typically refinance the home so the other spouse is removed from the mortgage. This can also free up cash to allow the spouse keeping the home to buy out the other’s equity.
- Both spouses keep the house. In some instances, the divorcing couple may decide it’s not the best time to sell the home or one spouse wants to remain in the home with minor children. At a later time, the divorcing couple may agree to sell the home.
Marital property and home value
An important thing to note about dividing a home in divorce is that under some circumstances at least part of the home’s value may be considered as marital property even if the deed is in only one spouse’s name, or even if one spouse owned it during the marriage. In these cases, the spouses will have to determine whether the home gained in value during the marriage, and how much of that gain in value should be considered marital property.
Property division can be complex, especially for divorcing couples who have a number of high value assets. The family home can be one of the most challenging assets to divide. Any homeowner who is going through a divorce can benefit from speaking to a knowledgeable family law attorney who can explain their options for dividing real estate interests.