Mediating the Marital Home Issue

The marital home often presents the most significant challenge when dividing assets during a divorce. For many couples, the home is not only their largest financial investment but also the source of substantial emotional attachment.

Ideally, both parties agree on the marital home’s handling. This allows the probate court to approve their settlement. This results in an equitable distribution of the estate, and both individuals can move forward with their lives. However, when disagreement arises over the fate of the home, the situation can lead to contentious, extended, and costly litigation.

How Family Lawyers Help Resolve Differences

A skilled family law attorney recognizes the differing interests each spouse may have in the marital home. By explaining the available options, a knowledgeable attorney can help both parties evaluate the feasibility of their positions. This guidance helps each spouse grasp the consequences of their decisions. It enables them to find an equitable solution and achieve a fair division of the home’s value.

For example, consider the case of Alan and Betsy, who have been married for 13 years and have lived in the same home for 11 years. Their 10-year-old son, Carl, has known no other home. Alan wishes to sell the property and divide the proceeds. He believes the current seller’s market and the home’s repair potential make this the best financial move. He seeks to relieve himself from the burden of an adjustable-rate mortgage. Additionally, he plans to relocate closer to his office, either to an apartment or a condo.

On the other hand, Betsy wishes to remain in the home. She has strong emotional ties to the residence, having spent years making it her own. Additionally, she actively participates in community organizations, surrounded by close friends. She also believes the home is in the best school district and wants Carl to continue his education there, maintaining his relationships with his lifelong friends.

The couple is at an impasse: Betsy wants Alan to transfer his interest in the property to her, while Alan insists on selling the house and splitting the proceeds. Additionally, the two disagree on the home’s value.

Equitable Distribution of Property

Under Massachusetts law, the court weighs several factors to determine who gets the home. It evaluates the financial condition of each spouse and their age and physical and mental condition. Also, the parties’ respective contributions to the home, its value, and funding sources are examined. The court considers each mate’s employability and evidence of marital misconduct.

An important factor is which spouse has custody of the minor child. Where the spouses reach no accord on the disposition of the residence, a court acting in the child’s best interests may emphasize stability and keep the minor in the childhood home to continue in the same school and maintain friendships. This deferred distribution is so-named because the home’s equity is awarded at a future date. It occurs when Carl’s emancipation prompts the sale. Deferred distribution can be beneficial to the parties if their financial circumstances enable them to hold onto their home until market conditions improve.

Deferred Distribution

If Alan and Betsy can afford to delay the sale of the home, this may offer a viable solution. Allowing Betsy and Carl to remain in the house until Carl reaches the age of 18, enlists in the military, or otherwise becomes independent can help avoid costly litigation. Divorce attorneys can negotiate specific terms that define when the home will be sold, such as if Betsy remarries or Carl becomes emancipated. They will also work through details like who will be responsible for the mortgage, real estate taxes, and repairs. The agreement will outline how the proceeds from the future sale will be divided, and it will likely stipulate that Betsy occupy the home rent-free to prevent Alan from seeking rent payments or pushing for an earlier sale.

Depending on the value of the couple’s overall estate, the attorneys for both parties may obtain a mutually agreed-upon appraisal of the home. This can then facilitate a division of assets, where Betsy receives the home and Alan is compensated through other assets, such as his pension, stocks, or artwork. Alternatively, if Betsy has the financial means, she may buy out Alan’s share.

Refinancing the Home

In addition to preparing a quitclaim deed to reflect Betsy’s new ownership, Alan’s attorney may request that she refinance the mortgage. While refinancing can involve closing costs, it could also result in a more favorable interest rate, easing Betsy’s financial burden. From Alan’s perspective, removing his name from the mortgage will protect his credit rating in case Betsy misses a payment and provide him with the flexibility to pursue new property options in the future. Both parties’ attorneys will negotiate a clear timeline for refinancing, with provisions in place for the court to order a sale if the process fails to move forward.

Can You Afford the Home?

Betsy’s divorce attorney will vigorously advocate for her desire to stay in place. However, a skilled family lawyer will also have a candid discussion with Betsy. Her credit score will be obtained and evaluated, and what home ownership entails will be addressed. Yard work and other home maintenance are costly and time-consuming. So too are household expenses, from the expected utility bills to the unanticipated replacement of the boiler. Frank discussions such as these educate spouses and enable attorneys to gauge whether the prime motivation is keeping the house or vindictiveness against the soon-to-be “ex.”

Once the house ultimately goes on the market, Alan and Betsy will have to settle on a property valuation from a mutually acceptable appraiser. The couple also will need to reach an agreement on issues such as choosing a realtor, deciding whether to rely on do-it-yourself repairs or hire professionals, and when to list their home and at what price.

If you have any questions about divorce or family law issues, call 978-225-9030 during regular business hours or complete a contact form, and we will respond to your phone call or submission promptly.

Interested in learning more about mediation? Check out our article on whether divorce mediation will work for your case.