Most married couples invest assertively in the homes where they live together. They might spend as much as a third of their monthly income on mortgage payments. While 20% down payments are no longer the standard in modern real estate transactions, those who purchased their homes years ago may have saved aggressively to afford a mortgage when they initially purchased a property.
People often make sacrifices to become homeowners and naturally want to protect their interest in it the home if they decide to divorce. Misinformation about divorce often leads to people making unnecessary mistakes as part of their divorce proceedings. The three myths below might result in unnecessary property division conflict between spouses who own a home together.
Myth one: Moving out means abandoning the home
The early days of divorce proceedings often see a family home become the site of a cold war between spouses. Each spouse may engage in unfriendly behavior with the hope of pushing the other to leave the property. People have long shared the claim that moving out of the marital home means abandoning it and giving up an interest in the property when people divorce. That is typically not true. Someone can move out of the marital home for the sake of their mental health without giving up their right to a share of home equity.
Myth two: The price paid is the value shared
People often look at their mortgage documents when preparing for divorce and assume that the terms included in their mortgage paperwork are what guide the property division process. However, the value of the home for the purposes of property division should reflect the current fair market value for the home, not what spouses paid when they purchased the home initially. Spouses may need to work with real estate agents or appraisers to establish the current value of the home so that they can appropriately divide its equity.
Myth three: The home is a winner-take-all dispute
It is surprisingly common for people to wrongly believe that one spouse gets the home while the other gets nothing. That approach to property division would be patently unfair. It is standard procedure to look at the totality of the marital estate and then find fair or equitable ways to divide those resources. Unless there is a prenuptial agreement clearly establishing the home as the separate property of one’s spouse, the fair market value of the home is likely part of the marital estate even though only one spouse can typically retain possession after the divorce.
Having a realistic idea about complex property division matters can help people play the foundation for a happier future after divorce. There are countless ways for spouses to handle immediate possession of a home and the division of its equity during divorce proceedings.
