In the U.S., the vast majority of people will get married by the time they turn 50. However, nearly half of those marriages will likely end in divorce.
Divorce is no longer a taboo subject: it’s a common experience that many people will go through. However, the fact that it’s common doesn’t make it simple. If you own a house together, the process can get even more complex. What happens to a house in a divorce?
In this guide, we’ll answer that question and more, so you can know what to expect when selling a house after a divorce. No matter where you are in the divorce process, keep reading to learn more.
Selling Assets Before Divorce
First, let’s take a look at what you can sell before the divorce actually goes through (or even gets started).
In a divorce proceeding, the law rules. Not knowing how it applies to your situation can cost you big-time. Unfortunately, this happens to many people who decide to start selling assets before a divorce.
The law refers to this as the “dissipation of marital assets.” While technically you have the right to do whatever you want with your property, the court takes jurisdiction over your property once the divorce proceedings begin. Not only that, but courts can review what you did before the divorce, and decide that you were in the wrong with your actions.
Maybe you aren’t actually trying to keep your spouse from keeping some of those assets in a divorce. Still, if you start selling things right before a divorce, that’s what it’s going to look like. You may have to pay a steep fee in exchange for this decision.
For example, if you sell something that later is determined a marital asset, you might be required to pay half of the income from the sale to your spouse (or ex-spouse).
Specifically, “dissipation of marital assets” refers to cases when you intentionally sold assets to make profits for yourself, beyond what was needed to pay the bills. This ruling can cause you to lose the entire asset’s value.
However, if you and your spouse mutually decide to sell assets and split the profits, you won’t face this problem. Keep in mind that your home is one of your assets, but anything else you own of value can apply here, too.
Selling House During Divorce
Now, let’s say the divorce proceedings have already begun. What happens when you want to sell your house?
Selling your home before the divorce goes through can make good financial sense. For one, you’ll usually get a better tax write-off if you sell before your divorce is finalized.
Sometimes, selling the home can also make the emotional process of getting a divorce easier to bear. When you let go of this physical reminder of the relationship, it can get much easier to move on in other ways. Selling forces you both to accept that you’re officially living separately (if you weren’t already).
Finally, selling can help you both get the funds you need to pay for the divorce itself. Even in mutually agreed-upon divorces, selling often becomes costly. Agreeing to split the profits equally can keep things peaceful and help both parties financially.
However, a few things will make selling during the divorce complicated. You’ll need to mutually agree on factors like whether to update, repair, or remodel parts of the home before selling. If you don’t, it’s possible that the house won’t sell.
But if you’re not getting along well, negotiating these things becomes much harder.
When selling during a divorce, it’s always wise to run any decisions you make by your attorney first. They can help make sure you’re doing things wisely. The emotions of the moment often cloud people’s judgments and make it harder to make decisions well.
Most importantly, ask your attorney about property division laws in your state before you sell. Certain laws, such as community property laws, affect the ways the profits can get split up.
Selling a House After a Divorce Agreement
Finally, you might choose to sell the house after the divorce is completed.
When you divorce, the courts will determine how the property you owned together gets split up. This can result in a number of different outcomes for your home, which will affect what happens when you sell.
For example, in rare cases, one person might get the home in the divorce. In that case, they get to sell it if they choose, and the other party plays no role.
However, it’s more common for some type of mutual ownership agreement to get arranged. In these cases, the partners might still each own a portion of the home. Sometimes, one person will get a small stake and get a percentage of the sales when the other person sells it.
If children are involved, it’s common for a divorcing couple to choose to keep co-ownership of the home so their children’s lives don’t get disrupted.
Selling will look different depending on your unique situation. But if you both own a part of the home, you’ll have to come to the decision to sell mutually. To keep things simple, you might choose to buy the other person out of their stake in the home before selling.
Even once the divorce is complete, this situation can leave you needing legal advice. Don’t hesitate to contact a lawyer to help you through this process.
What Happens to a House in a Divorce? The Answer is up to You
In a divorce, it’s hard to know how things will end up. But by working with an attorney, you can retain the most possible control over what happens to your house. They’ll help you see your options and choose the best one for your situation.
Selling the house can help you finally let go of your old relationship and start moving on. When you’re ready to take the next step, be sure to check out our guide to dating apps for serious relationships.