Marital Home Complications in Divorces

In an extreme case of what not to do in a contentious divorce, a western Pennsylvania man burned down his marital home after the divorce settlement ordered the proceeds from the sale of the home to his ex. While clearly not a good idea in the first place, the man only hurt himself further by filing a $160,000 insurance claim. He is facing charges of arson and insurance fraud and is currently in jail.

Property Division and the Marital Home

Obviously, a case such as the one above is extraordinarily rare. Less rare, however, are complications that arise during a divorce because of the marital home. For most people, a couple's home is easily the biggest asset and the biggest debt, often by a wide margin. In a down market, figuring out the best way to divide the marital home can be one of the biggest points of negotiation in property division.

Keeping the Home

If children are involved, parents may wish to keep the home to provide continuity and stability for the children after the divorce. Of course, this is dependent upon the ability for one parent to pay for the house. The financial transition after divorce can surprise, and factoring in all of the costs is essential before determining whether the current home is affordable post-divorce. If in doubt, consult with an attorney or financial professional to get an idea of what your costs will be after a divorce.

Keeping the home is also desirable for some homeowners who worry they will lose money or be unable to sell their home. An underwater home is a home with a mortgage that is greater than its current market value. This is a common occurrence in today's down housing market. When a home is underwater, it can be beneficial for one ex to hang onto the house until the market improves or just to avoid the hassle of selling.

Selling the Home

Despite the emotional attachment, finances may dictate that the home be sold and the proceeds divided equitably (although not necessarily equally) among the ex-spouses. While a transition can certainly be difficult, it might be the better solution than struggling to pay the mortgage payments each month. Past due bills and foreclosures will lower your credit score, meaning that it will be more difficult to obtain a new mortgage when you are again ready for a house.

Another Option

A novel approach has been for parents who cannot individually make mortgage payments, but who still want to provide a stable environment for the children, is to rotate living in the home even after divorce. One parent makes other living arrangements, such as renting an apartment, while the other parent stays in the home with the children. After a period of time, the parents rotate, so that each parent can live in the home part-time with the children.

While this has worked in some situations, it certainly is not the solution for everyone, as it requires cooperation and trust between exes. However, it is a good example of creative problem-solving in a down market.

Next Steps

There are many options for the marital home during and after a divorce. If you are considering divorce, speak to a divorce lawyer experienced in property division to discuss what is right for your situation.