In our current pandemic, many are becoming increasingly reliant on their family homes. Many that previously ate at restaurants now make their food or order from delivery services. Their living room may have been their children’s school after school closures. They may work from home or rely on this familiar space for comfort after they have been furloughed or laid off.
Because this challenging time drives us to spend more of our lives at home, your home’s fate could be one of the most contentious aspects of your divorce. If the court grants your spouse the house, can you afford a home that gives you the space you need to work, educate your children and live your life? In this increasingly challenging economy, can one of you afford to refinance the property and payout one-half of the equity to the other party?
What options are available to you?
North Carolina is an equitable distribution state, which means that while it is likely that the court will divide all marital assets equally, it is not guaranteed. The goal is to find a fair arrangement, and that can be a challenge when it comes to deciding who will own the house after the court completes equitable distribution. The economy’s impact on the value of other assets like retirement accounts can further complicate matters.
Because your house is probably one of the single most valuable assets that you and your spouse own, and most homes have mortgages associated with them, it can be challenging in certain circumstances to give the home to one person outright. In these cases, you may need to sell your home and divide the proceeds. However, it may take time to find a buyer for your house, and this means additional maintenance costs while you try to find a buyer.
One option is for you or your spouse to move out of the house and rent it to third parties. Renting could be profitable in the short term. It could also be hard to maintain the home and your new place if the former marital home is unrented or the rent does not cover all the expenses.
Another option is for one of the spouses to refinance the home and buy out the other spouse’s equity interest. If this happens, you may have additional considerations to keep in mind. For example, should tax consequences or future costs to sell the property be considered in determining the equity amount?
There are many factors to take into consideration and options to explore when dividing your marital assets. It is essential to consult with an experienced family law specialist to discuss the most viable options in your circumstance.