Nuts & Bolts of Dividing a Marital Property in a Divorce
One common difficulty in many divorces is how to address a jointly owned property or property acquired during the marriage. To start, lets define “marital property”. Marital property is any property acquired during the marriage that is paid using marital funds, regardless if it is titled only in one person’s name. As such, there is no such thing as “my property” unless the property was acquired prior to the marriage.
There are several ways to address the division of marital property in a divorce. If one spouse is interested in keeping the property, the property will need to be appraised to obtain an estimated current sale value. The spouse interested in keeping the house will need to have enough money to “buy out” the other spouse of her equal share of the property. In addition, the spouse will have to refinance the property to remove the spouse’s name from the house. It is good practice to obtain a “pre-approval” letter prior to agreeing to a buy-out amount in the event the you do not qualify for a refinance.
If neither spouse can afford a buy-out, or if there is no agreement on who should keep the home, then the house will need to be listed for sale. The proceeds of the sale, minus closing costs and deductions, will be divided between the parties.
Despite the simplicity of the process, most litigation revolves around the actual value of the house. If the parties cannot agree on a value, there may competing values from different experts. For cases where the parties agree to sell, there may be complications as to the agreement of the listing price and any reductions in price and/or credits recommended by the lender. As always, the devil is in the details. It is important to be represented by an experienced family law attorney when there is a marital property involved to ensure a proper division.