Married couples sometimes find themselves arguing about their homes. They may disagree about the division of maintenance or about what major improvement project should be next on the family’s agenda.
The home where people live isn’t just a source of comfort and personal pride. It is also a sizable investment that may represent a significant portion of the couple’s marital wealth. Therefore, divorcing couples often find themselves disagreeing about certain matters related to the home where they lived during the marriage. The three disputes below are among the most common disagreements that spouses report while preparing for divorce as homeowners.
Is the home separate property?
Typically, resources people acquire or invest in during marriage are at least partially marital property. However, one spouse may have owned the home prior to marriage or may have inherited it from their parents. While they may have used marital income to maintain the property or pay taxes on it, they may disagree with the claim that it is marital property. Spouses may find themselves fighting over whether home equity is part of the marital estate or not.
What is the home worth?
Even in cases where it is quite obvious that the marital home belongs to both spouses because they purchased it jointly during the marriage, they may still disagree about what it is worth. Couples may need to work with an appraiser to establish the current fair market value for the home so that they can properly report on the equity in their inventory of assets and debts.
How should equity be divided?
There are many different approaches to home equity. One spouse might retain possession of the home and all of the equity while the other receives other high-value assets, like a business or fully-funded retirement account. The spouse staying in the home might withdraw equity by refinancing as a way of compensating their spouse for some of the home’s value. In some cases, the simplest solution might be to sell the home and split the funds generated by the sale between the spouses.
Couples may need to work cooperatively to negotiate a settlement or may need to begin gathering documentation to prepare for divorce litigation when they own a home together. Understanding the disputes that frequently arise when addressing major assets can help people better prepare for the process ahead.