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Divorce and your home: 4 things to consider

On Behalf of | Dec 13, 2021 | Property Division

Ask anyone who’s getting divorced what questions most concern them, and you’ll come across a familiar shortlist of items. Typically, two items rank right at or near the top: child custody and the house.

Let’s set aside the questions of child custody for now and focus on the home. In many divorces, the house is the largest shared asset and investment. It has both real economic and emotional value. However, it’s important to avoid becoming too emotional when you consider your options. You want to understand how all the piece fit into the larger picture. Here are four things to consider.

Is the home part of the marital estate?

Generally, your house will be part of the marital estate. This is most often true even if it’s only in one spouse’s name. A prenuptial agreement may define the house as separate property, but the case becomes more complicated if you and your ex both paid toward the mortgage, repairs, association dues or other home expenses.

When the house is part of the marital estate, Wisconsin law assumes that couples will split it evenly, except for certain gifts. There are also exceptions allowed for when the division of assets may place undue strain on one party or if it doesn’t reasonably account for the length of the marriage and several other factors.

Who gets to keep the house?

Many people use mediation to reach an agreement about property division. In these cases, the divorcing couples, themselves, choose who gets to keep the house.

If you and your ex cannot reach an agreement, the court will review a range of factors to make a judgment. These will include whether one party lived in the home longer than the other, as well as each party’s economic situations and the assets either party might own that are not subject to property division.

If you keep the house, how do you divide it?

It is common for one spouse to keep the house even though the couple must split its value. When they do, they must resolve the situation somehow, and there are multiple options.

First, it’s important to agree upon the value of the house. This often means getting one or two valuations and reaching a consensus on its value. This also affects the amount of equity each spouse has in the house, assuming they still need to pay off the remainder of the mortgage.

Once both parties understand what their investment in the house is worth, the common options include:

  • If you’re moving out of the house, you can sell your share to your ex. This sale might center around one lump-sum payment or a series of payments over time.
  • If you’re staying in the house, you may forfeit your interest in other marital assets of equivalent value.
  • In some cases, as Forbes notes, you and your ex may continue sharing ownership of the house for a time. This might be the case if there are children nearly ready to move out for college. You would then define your responsibilities for the mortgage, utilities and other expenses, as well as the plans for selling the house and splitting the proceeds later on.

It’s important to update both the deed and mortgage. It is also important to account for any changes in value if your resolution involves an extended time period.

Can you afford to keep the house?

When it comes to the marital home, too many people make the same mistake: They let their emotions get the better of them, fight for the house, win it and then choke their budgets on the mortgage, repairs and other expenses. You want to make sure you budget for your life post-divorce.

Houses are expensive, and divorces almost always leave people in worse financial situations than they enjoyed during their marriages. Your financial situation might be okay after your divorce, and it might get even better over time. But the fact is that divorce separates couples that shared the costs of food and housing. After divorce, they don’t suddenly make more money, but they suddenly need to pay for two homes and don’t share all their meals. Life is more expensive after divorce, and you want to think about this before you fight for the house.

Property division is about the future

It’s easy for divorcing couples to get stuck on deeply emotional items like houses. But it’s important to keep your eye on the bigger picture. Your divorce is the end of one chapter in your life and the beginning of the next. As you approach property division, you want your attorney to appreciate your goals for that future. You want an ally who will help you reach those goals, even if that means you recognize along the way that you may have to make some concessions to get there.