A House is Just a Building; a Home Is a State of Mind

In many, if not most divorces, the family dwelling is the couple’s largest asset. Its disposition can be very problematic.

Couples facing a divorce generally have three options in regard to the marital home, but each spouse needs to look at the prospects with a cold eye. The house is a building on a piece of land; a home is a state of mind and a habit of the heart. In the emotional turmoil that accompanies most divorces, many people think home when they should think house. Home — and all the hopes and dreams it symbolizes — may have been an accurate way to describe the building in which a family lived during the happier times of a marriage, but house is a more accurate way to see it when the frigid winds of divorce blow in the door. In short, hanging on to a house will not make it a home.

The disposition of real estate has become even more problematic since the collapse of the housing market. In some metropolitan areas in some jurisdictions, unsold housing greatly depresses the housing market. Divorcing couples face the prospect of selling a house in a depressed market. Anecdotal reportage suggests that some couples have postponed divorces in the face of these sour conditions.

That said, a divorcing couple in general has three options:

1) Sell the house on the market. In this routine, the couple sells the house and makes a clean break and divide the proceeds after paying off the outstanding mortgage. This course is no different than if the couple remained married and sold the house as an intact couple moving elsewhere.

2) Sell the house to one spouse who buys the other out. This regime often appeals when the custodial parent wants to stay in the house so that the lives of the dependent children are disrupted as little as possible. It may require that the purchaser obtain a new mortgage, or take over the existing one. Sometimes one spouse uses promissory note to pay the other his or her share over time.

3) Agree to own the house together. This regime is often used when the couple wishes to minimize the disruption in the lives of school age children. Very often it is accompanied with a deferred sale agreement by which the former spouses agree that the home will be sold when the children reach a certain age. Until then, one former spouse (often the custodial parent) lives in the house. This routine may require the couple to work out the terms and conditions of maintenance agrees and payment of the mortgage. The couple, who owned the house as tenants by the entirety when married, now own it as tenants in common when divorced.

Options 2 and 3 require careful consideration, particularly for a custodial mother, who should do sharp pencil work in calculating the costs of taking over the property.

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