Dividing property in a divorce can be a stressful and painstaking process. Even when the property division is amicable, there can be some unseen obstacles and traps, especially when the asset in question is the home that was acquired during the marriage.
In the simplest case, the couple will agree to sell the home and share the proceeds. In such a situation, all of the details should be covered in the settlement. The couple needs to agree to share all costs, profits, expenses or losses in the sale. If one person is to bear most or all of the cost, that should be detailed in the agreement. Property taxes should be included as well.
If one person wants to remain in the previously jointly-owned house as part of the property settlement, then a determination should be made as to the proper procedure to remove the other spouse’s name from the mortgage. It is not enough that the court approves the settlement or that the title is updated. If the person’s name is not removed from the mortgage, that person can still be held liable for payments or default by the lender. The person keeping the home may have to apply for a separate mortgage under his or her own name.
There are several scenarios in which a court may have to rule upon the disposition of property in a divorce. A person contemplating a divorce may wish to consult with an attorney who has experience in family law matters. That attorney may be able to help negotiate and prepare agreements relating to spousal support and the division of marital property.
Source: Reuters, “Splitsville? How to divide property in a divorce”, Geoff Williams, October 07, 2013