Couples facing a divorce will have some difficult decisions ahead. Splitting the marital assets can be incredibly complex, and it becomes even more difficult when you have children. Deciding who gets to stay in the family home can lead to bitter disputes.
In this guide, we’re looking at the options available to you in the wake of a divorce and how you can settle this issue in the fairest way possible.
In general, marital assets should be split down the middle following a no-fault divorce, unless there is some reason that this shouldn’t be the case. For example, if one partner brought the asset into the marriage and it was previously agreed that it would not form part of the marital assets.
When it comes to the family home, this will typically be considered to be a marital asset. Even if only one parent was paying the mortgage, it would be considered a marital asset, as the other parent is likely to have been caring for the children and therefore unable to contribute financially.
Every situation is unique, but there are a few options available to you as you navigate the next stage of life.
A controversial one, but you might consider staying under the same roof, at least in the meantime. This can help you to co-parent effectively, but it could impact your ability to move on with your life. It can also get awkward if one parent is ready to move on sooner than the other. Some parents choose to do this until their children leave home as it makes the transition easier on them.
Another option would be to sell the home and split the proceeds down the middle. This could be a popular option if neither parent has a strong connection to the home. It can often be easier to move on if both parents are able to have a fresh start.
However, it’s important to consider the impact on your child. It could be very unsettling for a child to lose their family home at the same time as navigating their parent’s separation.
One partner buys the other out
Another popular method of splitting the family home is for one parent to “buy out” the other partner. This means that one parent will stay in the family home and retain a sense of stability for the child. This solution will require one parent having the resources to be able to offer the other partner money in exchange for their share of the property. It can also get complicated if one partner is unable to secure a mortgage on the property on their own as they will have to remortgage. If market conditions aren’t favourable at the time, it might not make financial sense to choose this option.
Use other assets to agree a fair split
Often the most popular choice is to use other assets to offset the value of the property. So, one partner will keep the home and the other will take a greater portion of the remaining assets. Again, this approach requires sufficient assets to be able to offset the value of the home, but if you have the capacity to do this, it’s often the fairest way to settle the distribution of assets.
Some couples will go as far as to arrange a further settlement that is due when the family home is sold. For example, you might agree that one parent will stay in the home until the children move out and then sell the property. They will then pay a percentage of the appreciation for the ex partner, as they will have missed out on profiting from the increased value of the home.