To divide your assets during a divorce can be a complex issue. If you own a family home together, you may have difficulty deciding how to handle the division of the property. U.S. News suggests that divorced couples may have a more rocky split due to mistakes during the real estate division.
With a clear agreement and decision-making, you can have a mess-free split.
Make a definitive decision
The real estate decisions that you may consider during a divorce include:
- Only one spouse keeping the home
- Both you and your spouse sell the home
- One of you buying out the other
- Both of you keeping the home
Each decision comes with its benefits and drawbacks. For instance, if one spouse keeps the home, he or she may have difficulty affording it. To sell the home and to split the costs can be a smooth transition, but you do have to consider how to split the profits. If one of you buys the other out, again, you must consider whether you have the money to do so.
Create a clear agreement
One of the biggest mistakes that divorcing couples make when it comes to real estate is that the divorce agreement has vague language. Be explicit in the ownership of the property following the divorce and who has which responsibilities. If you plan to sell the home in the future, put down who profits from the sale. Whether one of you receives the profit or the two of you split the profits, the language needs to express your wishes clearly. Without a clear agreement, if your spouse keeps the home but cannot keep up with the payments, then you could have a legal or financial liability.