One of the biggest hurdles in finalizing a divorce is figuring out how to divide marital property. California is a community property state and requires that each spouse walk away from the marriage with an equal share of property and debts. Figuring out who gets what can be difficult. This is particularly true when couples share certain large assets. The family home is often at the center of debate and argument.
Since couples have to receive an equal share of marital assets (and debts), it can be tricky to figure out what to do with the family home. If you are thinking about getting a divorce it is important to be prepared to discuss the future of your house. You will have a few different options available to you.
Selling the Family Home
One option is to simply sell the family home and split the proceeds evenly between both spouses. This can make it easier to divide all marital assets equally. This can also help to minimize complications that may arise because of a mortgage or tax lien. Remember, both spouses share equally in debts and assets. If you owe money on the house or are subject to a lien, you’ll have to figure out how that responsibility will be shouldered after a divorce. Selling the home can help to sidestep these complicated issues.
Buying Out Your Spouse
There is nothing that says you have to sell your home to a stranger. Spouses can also agree to execute a private sale. One spouse simply buys out the other spouse’s interest in the property. With this arrangement, the buying spouse would have to refinance the home to make sure that the other spouse is removed from the deed.
Keeping the Home
Sometimes you will want to keep the home in your family no matter how difficult that may be. If this is what you want to do it will be important to work with an experienced Los Angeles family law attorney. The current value of your home will need to be assessed, as will the presence of any debts and liens. This is crucial to ensuring that both spouses receive an equal share of assets and shoulder an equal share of marital debts.
If you want to keep the house you will likely have to give up something else that you want, in return. Remember, unless you and your soon-to-be-ex must have a prenuptial agreement in place, you must get 50 percent of the community property.
Let’s say your house is valued at $300,000 and you own in free and clear. If you want the house in the divorce, you’ll have to make sure that your spouse gets property (or assets) that are equal in value. This could mean giving up rights to retirement benefits, giving your spouse the keys to the family car, and handing over a significant amount of cash.
However, most couples today do not own their homes outright. Instead, most homes are subject to a mortgage lien. If you want to take the home, you can factor in the value of that debt into the equation. Let’s say you still owe $200,000 on your home. You could assume that debt and use it to offset the value of the home itself. As a result, you would only have to make sure that your spouse receives $100,000 in assets (or debt relief) in exchange.
Owning a home can also have certain tax benefits. These benefits can also be used as bargaining chips in a divorce. For example, If you want the home, you could also offer to give your spouse the right to claim a mortgage interest deduction for a period of time. It will be important to consult with an attorney before trying to negotiate any tax issues.
Get Help With Your Property Division
Dividing property can be a time-consuming and stressful process during a divorce. If you and your spouse cannot agree on how property should be divided, things can get even worse. Having an experienced Los Angeles family law attorney by your side during the process will help to ensure that your rights are protected. Call Berenji & Associates today to schedule a free consultation. We will fight to make sure that you get what you want out of your divorce.