Dealing With the Marital Home When You Get a Divorce
- Dealing With the Marital Home When You Get a Divorce
When couples divorce, each spouse is normally entitled to some portion of the equity in the marital home. How much of the equity each party takes is usually in dispute. Just as is in alimony and other property and debt division cases, the factors set forth in the divorce statute are what a judge must consider if your case goes to trial. These statutory factors determine who gets what.
You are faced with three options for dividing your home in divorce
- The home is sold immediately and the proceeds are split. There should not be any capital gains tax on the sale of the residence so long as the gain is no more than $500,000;
- The home is to be sold at some future date and the proceeds are split at that time. If the Separation Agreement allows one spouse to remain in the home for some time before it is sold, some tax consequences may result; or
- One spouse buys out the other’s interest in the home. If one spouse buys out the other’s interest in the property, careful attention must be given to any taxes owed by the selling spouse.
The process starts with getting an appraisal of your home
No matter which approach you take, you’ll probably need your lawyer to get an appraisal of the house. If the two of you can be cooperative, a joint appraisal should suffice.
When you divorce, ask questions about the marital home
If you take it as part of the settlement, can you cover the cost of the house? Make sure you can afford the mortgage payments. Inquire about what loan options you have: fixed rate? variable rate? Should you get a 15-, 20-, or 30-year note?
You should also consider whether you really want to live in the house, or whether you’re more focused on winning the house. Quite often, a year following the divorce, those who remain in the home report that they may have made a mistake in keeping the house. They claim that the house represents too many memories and that getting a fresh start may have been in everybody’s best interest.
If you’re the one who’s leaving, think through how the move will affect your credit. Will your name still remain on the loan? What happens if your spouse doesn’t pay? Even if your spouse does pay, will this hinder your ability to purchase another home since the loan on the first home is still in your name? Will creditors downgrade your credit score?
Consider tax implications of divorce when selling the home
Make sure you have every tax advantage in keeping the house, the right to itemize deductions, and deduct the mortgage interest and property taxes. That is another benefit of owning real estate.
Find out how affordable our divorce law firm can really be
Some people think that it’s important to hire an aggressive Texas divorce attorney to represent you in your case. This is not necessarily the case. Legal advice is important, but the traditional adversarial system can increase conflict and turn divorcing couples into lifelong enemies. That’s insane, and the flat-rate lawyers have a better way.
Since the Texas divorce statute is very clear about how divorce matters are to be handled, you shouldn’t have to pay a fortune to get the legal advice you are looking for.
Start by contacting us online about a free, no-obligation consultation. Or, you can call us.