You and your spouse have decided to divorce and your home is the primary marital asset. You agree you want the children to remain in the house. You even agree on which of the two of you stays in the house. Yet if the spouse who is staying on in the home cannot afford to buy out his or her spouse, you have a dilemma. Mediation or collaborative divorce may offer a solution that litigation might not be able to provide.
In litigation, judges generally want to divide assets right away. Most likely, he or she will order the house sold and proceeds/losses divided immediately. Given the current real estate market and depending on when the home was purchased, this can leave divorcing couples with few funds to set up their new households. Mediation and collaborative divorce provides more flexibility to divorcing couples about what to do with the marital home.
Sometimes couples opt to keep the marital home to provide some stability for the children. Other times the parties do not want to sell the marital home in a down market. Either way, the parties will need to reach an agreement on who pays the operating expenses (such as mortgage, insurance and utilities), who decides on and who pays for capital improvements. and details about how and when when the home will be sold at a future date.
Over the years, I’ve encountered a number of scenarios where couples have agreed to keep the marital home and negotiated an agreement as part of mediation or collaborative divorce. Those include:
- Couples agree to delay the sale of the marital home until after the youngest child graduates high school.
- Couples agree that the spouse remaining in the home will eventually buy out their ex-spouse.
- Couples agree to sell the martial home within a specific time period (e.g. wait until real estate market improves before putting house on market)
Of course, these are just a few of the more common scenarios that arise when the marital home is the primary asset. No two divorces are exactly alike and that is why mediation or collaborative divorce provides the most flexibility when it comes to resolving issues with the marital home.
In many ways, the marital home is symbolic of the marriage. There is the natural assumption that when the marriage breaks up, the home does, too. More often than not, what the marital home really represents is the family. Marriages can end but families, albeit under different circumstances than during the marriage, go on. With mediation and collaborative divorce, divorcing couples can explore a number of avenues to keeping the marital home for as long as the family needs.