A home is likely one of the biggest purchases you will make in your lifetime, whether you make the purchase alone, with a partner, or with your spouse. If you are married and are getting a divorce, you may be wondering what will happen to your family home now that you are no longer together.
Your first step will be to determine if your house is considered marital property. In New York, an equitable distribution state, all marital property is subject to fair and equitable division in the divorce. If you and your spouse lived together in your home during your marriage, it will likely be considered marital property, even if one of you purchased it on your own prior to the marriage. The reason for this is that both spouses often contribute to the home during the marriage, both financially and non-financially. Therefore, while the home may have originally been separate property, it is now considered marital property.
If your house is considered marital property, courts may consider a few options when it comes time to decide what to do with the house. Here are a few options:
- Sell the house and divide the proceeds. The court will decide how to divide the proceeds fairly and equitably.
- Continue living in the house temporarily and selling it at a later time.
- One spouse buys out the other’s share and refinances the mortgage so that the other spouse is removed from the loan.
Before choosing an option, it is a good idea to consult an appraiser to determine the house’s true value using the sales comparison approach, cost approach, and/or income capitalization approach. If you and your spouse do not agree on the valuation, you may seek multiple appraisals.
Many people have an emotional attachment to their family home and other marital assets. However, it is in your best interest to keep your emotions out of the property division process. For example, may not be wise to keep the home if you are not able to keep up with the monthly payments and maintenance required without your spouse’s support. Making smart choices now will ensure your financial stability in the long run.