Although the marital home is usually the most valuable asset in a divorce case, divorcing couples and their lawyers can be surprisingly casual in its treatment in a property settlement or divorce judgment. Similarly, the mortgage on the marital home is often the biggest shared liability of a divorcing couple, yet little thought is given to securing settlement or judgment terms which will protect a spouse who relinqueshes possession or ownership of the home in the event that the home is not sold or refinanced as agreed or in a timely manner.
If one partner will be keeping the marital home, the judgment will ideally set forth a date by which that partner will have refinanced the home to remove the other spouse from any financial obligation, and will buy out the other spouse's equity. Similarly, it will provide for when and how the spouse who moves out of the home will transfer title.
Particularly when children are involved, a divorcing couple may seek a way to permit one spouse to stay in the marital home after the divorce even though it will not be possible to refinance the home until a later date. If possible, this should involve the parties agreeing to the value of the home, or stipulating to an appraisal, with the spouse who is going to stay in the home buying out the other spouse's interest. In this ideal scenario the spouse who stays in the home will work with the mortgage financing company or refinance the home, such that the other spouse is removed from any mortgages, liens, or other financial obligations relating to the home.
Sometimes spouses will agree that one spouse can remain in the home subject to contingencies, such as "until the minor children reach the age of eighteen", with the home to be sold and equity divided at a later date. Sometimes there are additional contingencies, such as a provision that the agreement ends if the spouse who remains in the home remarries or cohabitates with somebody. Any such agreement should make clear how the equity is to be determined and divided when the home is ultimately sold, taking into consideration any improvements that may be made subsequent to the parties' divorce. It should also make clear how the costs of house payments, taxes, repairs and maintenance of the home are to be allocated between the divorcing couple, and what remedies are available in the event that a spouse fails to meet those responsibilities.
If one partner will be keeping the marital home, the judgment will ideally set forth a date by which that partner will have refinanced the home to remove the other spouse from any financial obligation, and will buy out the other spouse's equity. Similarly, it will provide for when and how the spouse who moves out of the home will transfer title.
Particularly when children are involved, a divorcing couple may seek a way to permit one spouse to stay in the marital home after the divorce even though it will not be possible to refinance the home until a later date. If possible, this should involve the parties agreeing to the value of the home, or stipulating to an appraisal, with the spouse who is going to stay in the home buying out the other spouse's interest. In this ideal scenario the spouse who stays in the home will work with the mortgage financing company or refinance the home, such that the other spouse is removed from any mortgages, liens, or other financial obligations relating to the home.
Sometimes spouses will agree that one spouse can remain in the home subject to contingencies, such as "until the minor children reach the age of eighteen", with the home to be sold and equity divided at a later date. Sometimes there are additional contingencies, such as a provision that the agreement ends if the spouse who remains in the home remarries or cohabitates with somebody. Any such agreement should make clear how the equity is to be determined and divided when the home is ultimately sold, taking into consideration any improvements that may be made subsequent to the parties' divorce. It should also make clear how the costs of house payments, taxes, repairs and maintenance of the home are to be allocated between the divorcing couple, and what remedies are available in the event that a spouse fails to meet those responsibilities.
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