Building a home together is part of building a life together for many married couples in Sacramento. But when a person’s marriage goes south and divorce is on the horizon, couples will need to decide what to do with the family home. They have several options.
Option 1: One spouse keeps the home
One option is for one spouse to keep the home and either buy out the other spouse’s share in the property or exchange the home for assets of an equal value in the property division process. If they choose a buyout, the spouse keeping the home will pay the other spouse 50% of the home’s current market value. This means the spouse keeping the home must have enough cash to afford the buyout or they must be able to roll a buyout into a home refinancing. In addition, they will need to ensure that they can afford the costs of homeownership such paying the mortgage, homeowner’s insurance, taxes and upkeep on a single income.
Option 2: Sell the home
In today’s hot real estate market, some couples may find it makes sense to sell the family home especially if neither spouse wishes to keep it. Selling a home allows each spouse to reap half of the proceeds from the sale, and it can give the couple the clean break they need to move forward after the divorce. Keep in mind that depending on how long they have owned the home, they may be responsible for paying capital gains taxes on the profits made from the sale.
Option 3: Both spouses keep the home
A more unusual option is for both spouses to stay on as co-owners of the home, at least for the time being. This may be a good choice if they want their children to stay in the environment that they are familiar with or if neither spouse can afford a buy-out, but they do not want the home sold. If spouses choose this option, they will need to make an agreement on who will pay the mortgage and other household expenses. They will also need to reach an agreement on when they will eventually sell the home and who will receive the proceeds of the sale.
Learn more about property division in California
Deciding what to do with the family home can be an emotional decision, but it is one that must be looked at pragmatically. This post is for informational purposes only and does not contain legal advice. Our firm’s webpage on family law may be a useful resource for those who want to learn more about this topic.