During a divorce where property is being divided, certain assets may be challenging for the spouses to parcel out. This is particularly true for the marital home. In addition to having sentimental value and being a nurturing place for children, the family home is often a couple’s largest single asset. Although Michigan law includes the marital residence within the property to be equitably divided in a divorce, there may be alternatives to selling the home and splitting the proceeds.
When a marital estate is of high value or one spouse has significant independent assets, a straightforward solution can be for one spouse to buy out the other’s equity in the home, either with personal assets or by providing the other spouse with more cash or assets from the marital estate in exchange. For example, if each partner’s share of the marital home’s equity is $250,000, one partner could offer the other an additional $250,000 in retirement distributions. There may be adjustments in the amount given as a set-off to account for the continuing expenses of keeping the home, such as mortgage payments and taxes.
Where a buyout is not a viable option, there are other creative solutions to consider. When children of the marriage are below maturity age and one spouse will be maintaining primary custody, it may make sense to allow that spouse to continue to live in the marital home temporarily until the children are grown in order to avoid both spouses having to pay for the cost of a new home or rental. This is essentially a deferral of the division of the home as an asset. It may make sense in situations where the existing marital home is paid off or the mortgage costs are comparatively low. In this scenario, the spouses may continue to split the costs of the marital home as monthly expenses and then, at an appropriate time in the future, sell the home and divide the proceeds.
If you and your spouse are sharing custody of your children, a second alternative to explore with your divorce attorney is whether you and your ex-spouse can alternate residing in the marital home for designated time periods, with your children living there full-time. This type of an arrangement, known as “nesting,” can work well in certain circumstances but can also be problematic if boundaries and communication are not well-established.
At Dawson Family Law, PLLC, we understand how important a marital home can be and why it can be a hardship to be forced to sell it. We work closely with our Michigan clients to explore all possible options for our clients to stay in their home when that is their preference. To talk with an attorney about your options, call our Sterling Heights office at 833-671-4445 or contact us online.