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Options for dividing a home in a divorce

On Behalf of | Dec 28, 2018 | divorce

When people in Connecticut get a divorce, they may have to decide what to do with the home they own. Some couples might agree to sell the house, but this often comes at the order of a judge rather than through negotiations.

If one spouse takes the home, that person should make sure that the mortgage, taxes and other upkeep is affordable. Another common error spouses make is not removing the one who no longer owns the home from the deed even if they refinance the mortgage. While this can be a way to reduce paperwork, it also means the couple remains linked financially. If an amicable divorce stops being amicable, this could create problems.

One spouse could buy out the other or could simply sign the house over to the other spouse without money being exchanged. If there are children, the couple might want to try an arrangement known as “nesting.” With nesting, parents continue to co-own the home. They also take residences elsewhere. The children remain in the home, and parents alternate living there. While this is sometimes recommended as a way to help children adjust to the divorce, it is usually only a temporary arrangement since it can be difficult emotionally and financially for parents. Parents might combine nesting with an agreement to sell the home in a year or two.

If one person takes the home without money being involved, the other person might want to take another asset that has equal value. However, it is important to make sure that the assets are truly equal. For example, people should look at whether a retirement account will be taxed on distribution and if that reduces its value. Another consideration in property division might be whether one person would prefer to keep a more liquid asset, such as a savings account.