During the property division process in a California divorce, the spouses must divide all their community property. This can include everything from household items to cars, bank accounts and more complex assets. For many married couples, a home is one of the most significant assets in the community property. Divorcing couples should be familiar with their options for dividing a family home during divorce.
There are three main approaches to dividing a home in a California divorce.
- Divide the home and share the proceeds of the sale. The divorcing couple may decide to sell their home and share what is left over after the mortgage is retired and any taxes and sale-related fees are paid for. This can be the simplest and cleanest way to address this asset during divorce but they will have to wait on the sale of the home to use this option. Of course, it also means both parties have to find somewhere new to live.
- One spouse buys out the other spouse’s interest. One spouse may want to keep the home and the other spouse may want to move on. An option in this situation is for the spouse interested in keeping the family home to buy out the other spouse’s interest. This process requires hiring professionals to determine the home’s fair market value. Once the value is determined, the parties can work out a plan for dividing its value and for one to buy the other’s share. It is usually a good idea for the spouse keeping the home to refinance it and remove the other spouse from the mortgage.
- The spouses continue as joint owners of the home. In some situations, both spouses may agree that one spouse should remain in the home. For example, they may decide that one of them will remain in the home until minor children living in the home are grown up. In other situations, the parties may decide to wait to sell until the housing market improves or other issues are resolved. For whatever reason, the divorcing couple agrees one spouse will remain in the home and they will continue as joint owners for a period of time, or even indefinitely. The couple will need to develop an agreement for how to handle home-related expenses if they decide to continue as joint owners of the home.
To better prepare for the property division process, divorcing couples should be prepared with their options for dividing their home which may be one of their more significant assets. It can help them better navigate the property division process especially when the divorcing couple has a number of high value assets to divide during their divorce.