Couples in Maryland know that divorce means a major shakeup in a person’s life. For most people, splitting marital bonds means saying goodbye to the place they’ve called home, but some people might decide to stay put while their ex moves out. No matter what decision spouses make in regards to their marital home, there are a number of pitfalls that can mean major headaches and potential financial ruin for those who don’t pay close attention to the details in the divorce process.
The home is often a major source of property division contention in a divorce. This is not just because it’s often the largest asset, but also because of its extremely personal and has sentimental value. So when it comes time to figure out if one party stays put while the other moves out or if the couple wants to sell it and split the proceeds, there are some important factors to consider. It’s important to discuss your property division plans with one another or a qualified professional who can help identify the little things that can come back in a big way for the unwary.
Selling the home outright can be the most simple property division method, but the couple then subjects themselves to potential capital gains taxes or they could most likely take a financial hit in a slow housing market.
If one party wants to keep the home, the ex who moves out needs to make sure to remove their name from the mortgage and any other obligations on the house. This is easier said than done, and often requires refinancing, which is also an uncertain proposition depending on the income of the remaining spouse and the value of the home.
The important thing is to negotiate a marital property solution that works. This includes considering each option and the financial ramifications that comes along with it. When divorcing spouses can’t agree, the court may decide to split things 50/50, which is a situation where oftentimes nobody wins.
Source: Reuters “Splitsville? How to divide property in a divorce,” Geoff Williams, Oct. 7, 2013