On behalf of The Walters Law Group, Ltd. posted in Divorce on Sunday, January 12, 2014.
When a Chicago-area couple undergoing divorce owns a home and struggles to divide assets, there are various ways to address this looming challenge. In many cases, it can make sense for one spouse to remain in the home while the other continues to pay his or her share of the mortgage. This may be a recommended scenario as a short or mid-term solution if a fixed mortgage is involved and moving elsewhere would be expensive. For this approach to be feasible, the parties typically need to be on amicable terms. They must also be able to afford the mortgage payment and other living costs associated with the property.
Some couples, especially those in acrimonious situations, will prefer an immediate sale of the residence. Assuming that the property can be sold rather quickly, this option offers those involved an opportunity for a clean break. Any equity in the home would be typically treated as a marital asset and split between the husband and the wife. However, if the exact division of equity were to be contested, unnecessary costs could accrue.
An alternative to selling the home to a third party is to have one partner buy the other one out. The real estate then moves from being jointly-owned to being owned only by one spouse. This option can eliminate the need for two new homes to be purchased or rented. By moving the joint mortgage into one name, the couple can enjoy essentially the same proceeds as selling, with one being able to remain in the home.
Because divorce proceedings can involve extensive negotiation, couples seeking legal separation may wish to consult legal services. The efforts of a family law attorney may be able to ensure that the results of asset division are acceptable for both parties.
Source: FT Adviser, “Pros and cons of options for divorcing couples“, Emma Ann Hughes, January 02, 2014