A Michigan divorce often involves equitable distribution of property, meaning marital assets are divided fairly but not necessarily equally between spouses. One of the most complex assets to handle is the family home, which can involve significant emotional and practical concerns. Who gets a home that is deemed marital property depends on several factors, such as each spouse’s financial situation and contributions to the marriage and the needs of any children.
The following are ways that a house can be divided, with the pros and cons of each approach:
- Selling the house and splitting the proceeds — This is often the simplest solution. The house is sold and the net proceeds are divided according to the court’s determination or an agreed-upon ratio. Both spouses make a clean financial break and can each acquire new housing. However, selling the home can be bad economically. If the real estate market is slow or the home is heavily mortgaged, both parties could walk away with less money than anticipated. One or both spouses might have a strong attachment to the home or may think it best for the children to stay there until they are grown.
- One spouse buying out the other’s interest — This requires coming up with the cash or assets to compensate the spouse being bought out. It may mean refinancing the home to remove the other spouse from the mortgage. However, buying out the other spouse can be expensive, especially if the home has appreciated in value. The spouse keeping the home must also take on full responsibility for the mortgage, property taxes and other costs.
- Trading assets of equal value — Similar to a buyout, one spouse might keep the house while the other receives a larger portion of a retirement account or other assets. This approach offers flexibility and allows each spouse to walk away with assets that align with their future needs and goals. However, it can be difficult to ensure that the assets are truly of equal value, and trading non-liquid assets like retirement funds for a house may not be ideal for long-term financial security.
- Granting exclusive occupancy to the spouse with child custody — Exclusive occupancy of the home may be granted temporarily to the spouse with primary physical custody of the children. This provides stability by letting the children stay in their familiar environment. However, it usually requires the noncustodial spouse to share expenses such as taxes, mortgage payments and utilities. This may call for a setoff of those costs by granting the paying spouse a greater share of other property.
Gaining ownership of the family home in a divorce comes with strings attached. Mortgage payments, property taxes, homeowners’ insurance premiums, maintenance and repair costs and condo or HOA fees must be shouldered by the owner. These anticipated ongoing costs must be accounted for as part of the equitable distribution.
Whenever possible, it’s best for divorcing couples to work out a voluntary plan regarding the family home with the aid of a qualified Michigan asset division lawyer. You may wish to try mediation, which allows for more creative and personalized solutions. Leaving the decision up to a judge can result in an outcome that neither spouse finds favorable.
Dawson Family Law, PLLC in Troy advises Michigan residents on how to achieve a fair distribution of marital assets during divorce. To schedule a free consultation, please call 586-514-0084 or contact us online.
