Deciding what to do with your home during a divorce is more than just a financial decision—it's about finding a solution that respects both your emotional attachments and practical needs. In Colorado, the division of property aims to be fair, considering each person's circumstances and contributions. This guide will explore in-depth the options for dealing with the family home during a divorce, helping you understand which choice might be right for you.
Need guidance on handling your home during a divorce? Foothills Collaborative Divorce Professionals are here to provide clear and supportive advice.
One Spouse Keeps the Home
When one spouse keeps the home, it can provide continuity and stability, especially if children are involved. This option is appealing if one partner is particularly attached to the home or if it makes sense for the children's schooling and social life. However, the spouse who takes over the home must usually compensate the other spouse for their share.
This typically involves determining the home's equity and refinancing the mortgage to both buy out the other spouse's share and ensure the mortgage is in one name only. Refinancing can also adjust the mortgage payments to be more manageable for one income. This option requires careful financial evaluation to ensure the spouse who keeps the home can afford the ongoing expenses, including mortgage payments, property taxes, maintenance, and insurance.
Importance of Timely Refinancing
When one spouse is taking over the home, it’s crucial to refinance the mortgage promptly. Waiting too long to refinance can complicate the financial separation necessary for a clean break. If the mortgage isn’t refinanced, both spouses remain legally responsible for the loan, which can affect their credit and ability to invest in new properties.
Typically, divorce agreements will set a specific timeframe—often six to twelve months—within which the refinancing must be completed. This deadline helps ensure that both parties can move forward financially independent of one another and prevents potential legal disputes about property responsibility.
Read more on refinancing from FCDP member Todd Huettner > Refinancing Your Home After a Divorce
Selling the Home
Selling the home and splitting the proceeds is one of the most straightforward ways to deal with a shared property during a divorce. This option is often chosen when neither spouse can afford to keep the house on their own or both wish to start fresh. Selling the home turns it from a fixed asset into liquid capital that can be divided according to the divorce agreement.
The process involves agreeing on a realtor, preparing the home for sale, and deciding how to divide any costs associated with selling the home, such as repairs or improvements to increase its market value. The timing of the sale can be crucial; selling a home too quickly can result in a lower price, while waiting too long can delay the finalization of the divorce settlement.
Deferred Sale of the Home
A deferred sale involves delaying the sale of the family home until a specified event occurs, such as when the youngest child graduates from high school. This option is chosen to minimize disruption in the children’s lives, allowing one spouse to remain in the home with the children until it is sold later on.
In this scenario, one spouse typically remains in the home, while the other may receive other assets to balance the division of property or may have their share of the home's value held in trust until it is sold. It's important to have a clear legal agreement outlining responsibilities for mortgage payments, maintenance, and how the eventual sale proceeds will be divided to prevent conflicts later on.
Why Collaborative Divorce Can Help
A collaborative divorce, where both parties work with a team of professionals to negotiate terms, can be especially beneficial when deciding what to do with the family home. This approach encourages open communication and negotiation, which can lead to more amicable solutions and a smoother process:
- Reduced Conflict: This method reduces stress by focusing on cooperation over confrontation.
- Comprehensive Planning: Financial and emotional considerations are addressed, ensuring that decisions support everyone’s long-term well-being.
- Custom Solutions: A collaborative approach allows for creative arrangements that fit unique family needs, which might not be possible in a more adversarial setting.
Contact Foothills Collaborative Divorce Professionals
Making decisions about your home in a divorce is complex, but you don't have to navigate it alone. Foothills Collaborative Divorce Professionals can help guide you through each option, providing the support you need to make informed decisions. Our experts are here to assist you in finding a solution that works best for your family’s future.
Considering your options for the family home during a divorce? Reach out to us for thoughtful and thorough guidance.
