We are often asked how is the house handled in a Louisville divorce case? Who gets to keep the family home and what should you know about how this important issue will be handled in your divorce?
The first question is going to be the characterization of the home as an asset in the divorce. Generally speaking, if the asset was acquired by either or both of the parties anytime from the date of the marriage until the date of separation it will usually be considered to be “marital property.” There are obviously many exceptions which must be considered, but for the sake of this conversation we will presume what is most common in a Louisville divorce case: the house is a marital asset. (Also, it is important to note that it doesn’t matter whose name is on the title of the property, the mortgage or the deed. If the property was acquired by either or both during the course of the marriage it is a marital asset).
So, how is the house handled in a Louisville divorce case? There are basically four different strategies to consider. The first option is to simply sell the house. The net proceeds from the sale will be divided as part of the property division phase of the divorce. Marital assets are to be divided equitably between the parties.
The second scenario involves one party buying out the interests of the other. Generally, in order to accomplish this the home must be appraised and the valuation of equity in the home must be established. In order to keep the home one party would normally have to reimburse their former spouse for their marital interest in the property, in this case half of the equity in the home. It is important for the party who will not be keeping the home to understand there is considerable risk associated with this option unless and until the home is refinanced and their name is removed from the mortgage. The order of the Family Court awarding the house to the other party does not remove the financial obligations of either party under the existing mortgage. Forewarned is forearmed.
The next possibility is somewhat akin to the above, and involves simply trading the asset (the home) for another marital asset, such as a substantial retirement account, retained ownership of a business or investment(s). “You keep the house, I’ll keep my company.”
Finally, the parties may elect to keep the home as a partnership after the divorce. Usually the parties would establish an entity to hold the asset and each would receive a proportionate interest in that entity. In some cases, the children actually remain in the family home and the parents rotate in and out for visitation. In others, the house provides rental income.
How is the house handled in a Louisville divorce case? This depends upon our client’s goals and objectives. However, each option carries risks and rewards and this is why you need the proven, experienced advice and counsel of the divorce and family law attorneys at Dodd & Dodd. We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
