For many divorcing couples in California, the family home may be one of the most materially valuable and emotionally resonant assets being addressed in divorce negotiations. Unlike bank accounts or retirement funds, there’s no simple way to divide a home in two. This is one reason why couples decide to sell the home and each start fresh in a new place. If the couple sells the home during the divorce, they can pay off the remaining mortgage with the proceeds before dividing the excess between both parties. In some cases, especially when children are involved, one spouse may want to remain in the home to ease the post-divorce transition for the kids.
It is important to make sure that the spouse who wants to remain in the home can afford the house after the divorce. In the first place, that person may need to buy out the other spouse for the equity in the home. This can often be done through trading off other financial assets, but it can be a challenge if the house is entirely or mostly paid off or if the couple has few other substantial assets in addition to the family home.
It is also very important to refinance the mortgage in the name of the spouse who will stay in the home. Otherwise, the other spouse could be held liable for debts or defaults, even years later. At the same time, the deed should be transferred solely into the name of the person who is keeping the house to prevent any future disputes.
The financial aspects of a divorce can have long-lasting effects that linger long after the emotional and practical matters are resolved. A family law attorney may work with a divorcing spouse to negotiate a fair settlement of major issues, including property division and spousal support.