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Splitting up the house in divorce

Dividing assets in the event of a divorce is tricky business. In most cases, it's easy for both partners to agree on living separately, but what about key assets such as the family residence? With sentimentality and memories attached to a home, dividing it or determining who gets to stay or not is one of the most complicated parts of a divorce settlement.

Selling the home

Under California's community property divorce laws, if both parties agree on selling the home and splitting profits, the process is pretty straightforward. Before you can begin negotiations on divisions, you first must figure out the property value. There is an entire industry of property valuation experts available to turn to. In fact, agreeing on the one you will use is often a key part of the settlement negotiations. The expert will then determine a price based on your local market. That seems simple enough, but it is just the first step in what may become a complex component of the final divorce property settlement.

Mortgage and title

A divorce settlement doesn't directly affect the current mortgage or the title of the home. The two are entirely separate issues in and of themselves. Titles give you full ownership of the house, whereas a mortgage gives your lender the right to foreclose on the house if payments are not being met. Typically, the partner who decides to stay in the house will choose to refinance in order to remove the other person's name from the mortgage obligation. Another benefit of refinancing is that it allows the person who is staying in the house enough money to pay off the other person's equity interest. As the other person signs over their interest, it changes the title. This benefits both parties.

Division pending sale of the home

While selling the house and splitting the cash proceeds is certainly the cleanest way to divide the asset, it is not always the most feasible. In some markets, homes take time to see. One option for a property settlement may be to agree that the house is put in one party's name and the property is put on the market. Upon sale, the proceeds must be split evenly with both parties, per terms of the settlement agreement.

Delaying the division process

Sometimes, delaying division of the home is beneficial and necessary in certain circumstances. If there are young children living in the home, the parents might agree to allow them to live there with the custodial parent until they reach a certain age. Usually, the person living in the home is responsible for paying the full mortgage. The parties will then sell the home and divide profit when the kids are grown.

Unfortunately, dividing a house is just one thing that needs to be determined in a divorce settlement. Vehicles, furniture, and other assets are still to be considered. If both parties are willing to peacefully agree and come to concessions, the process will be much simpler for everyone involved.

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