For many couples, addressing property issues in divorce can be a challenging task. This is especially true for shared assets, particularly mortgaged real estate for which both spouses are responsible and which both spouses want to keep after the breakup.
Depending on a couple’s circumstances, there a several potential outcomes when it comes to shared mortgages in divorce. One option for couples is to sell the home and divide the profits. This is a good option when neither party is set on keeping the property and the profits will allow them to pay off their mortgage. Selling a home does cost money, though, and depending on market conditions, couples could walk away with less than they would like. For this reason, it is important for couples to consider the cost of selling the home, as well as how much equity they have in the home compared to the likely sale price.
In many cases, one or both parties would like to keep the home after divorce. When both parties want to take the home, it can be complicated. First of all, there is the issue of who is entitled to the home, and this can depend not only on the couple’s overall financial situation, but also what is in the best interests of the children. Under New York law, courts divide property equitably between the parties, taking into account a variety of factors relating the circumstances of the case and of each spouse.
In determining how to divide the family home, courts will look at things like the income and property of each party and the need of a custodial parent to occupy or own the family home, as well as household items. Thus, not only financial circumstances, but also a divorcing couple’s custody outcome can affect division of the family home.
Aside from the issue of entitlement to the family home, there is also the question of whether a spouse who wants to keep the family home is actually able to do so, given their personal and financial circumstances. We’ll continue with this topic in our next post.