With the unprecedented rise in real estate values, it is important to consider all options when you are in the middle of a divorce. Many parties overvalue certain assets in a divorce, whether for sentimental reasons, belief that the children will be less affected, or because of a preconceived notion that the party with the marital home “wins” in the divorce.
Many parties later regret the decision to keep a home due to oversize of the home, unanticipated upkeep and improvements required, or realization that they will not net the full equity after sale of the real estate. With the current real estate market, those decisions are even more difficult.
Parties must decide whether keeping the house will ultimately result in greater gain when the asset is sold at some point in the future. The market may not be so bullish at that time and the commissions and closing costs are generally not considered into the division at the time of divorce. Another consideration driving many decisions is the relative lack of other homes which the party may purchase to replace the house being sold.
There are always at least 3 options for any real estate when going through a divorce: (1) you keep the home; (2) your spouse keeps the home; and (3) the home is sold. The party keeping the home will generally be the one willing to pay more and the other party is often entitled to half of the marital equity. Considerations include any premarital or non-marital interest, improvements made, timing of equity payment, offset with other assets and requirements to refinance.
If you are divorcing, consider all options and realize that your home is viewed by the court as any other asset. Try not to let emotions guide your financial decision making and listen to your attorney as they have much more experience going through the process and should be emotionally detached. For consultation in Northern Kentucky, contact Michael Bouldin at [email protected] or call 859-581-6453 (581-MIKE).