If you and your spouse own a home together — as many spouses do in Colorado — your divorce is immediately more complicated. You and your soon-to-be ex, for example, will need to make a decision about whether one of you will keep the property or if you’ll sell it and divide the proceeds. You’ll also need to determine how much of the home equity value both of you are entitled to.
Among the many solutions available to spouses who need to divide a residence in divorce, here are two of the most common options:
Sell your home and divide the sale proceeds
The easiest way to divvy up the value of a residence is to sell it outright and divide the remaining assets. Selling your home means you’ll have liquid cash assets available. Then, it’s merely a process of determining how much of the home value each spouse is entitled to. Often, the spouses can split the home proceeds 50-50, but sometimes — for example if one spouse paid into the home mortgage before the marital union — one spouse may be entitled to more of the home’s value.
One spouse keeps the home
If the home has been paid for, and one spouse wants to keep living in the residence, the spouse who keeps the home will need to buy out the other spouse’s share. If sufficient marital assets exist — for example, if the couple owns another piece of property — the spouses may be able to organize their asset division process to balance one spouse keeping the family residence.
On the other hand, if the home has not yet been paid for, the spouse who keeps the residence will usually need to get a new mortgage in his or her own name only. As long as the spouse has sufficient income and a good credit history, this shouldn’t be a problem.
Investigate all of your home division options
The above two options are the most common ways that divorcing spouses divide a home. However, there are other options and solutions that could fit a couple’s needs. Make sure you fully understand all of your home property division options in your divorce before you select the strategy of your choice.