What happens to property after a divorce is an understandably common question posed to lawyers dealing with divorces and dissolutions. According to a family law expert, marital assets that are jointly owned or acquired during a marriage can be divided between spouses and non-matrimonial assets are those which are not usually split. We look at what qualifies as a matrimonial asset, what doesn’t and how your property or properties could be divided.
What counts as a matrimonial asset?
One of the first steps you will need to take following your divorce is to work out how your joint assets will be divided. In all cases, the more you can agree on between you, the better. It’s important to know that even if you officially own the property or the mortgage is just in your name, it is still usually considered a joint matrimonial asset when you are married. Non-matrimonial assets, if agreed as such by the courts, as usually inheritance, businesses set up before a marriage began or property acquired following separation. They can be a complex area of law; if you ask for an asset to be considered as non-matrimonial, this isn’t always granted.
What do the courts look at?
There are no hard and fast rules on exactly how property is split, with a number of factors being taken into account including the value of the property, the length of your marriage, any dependent children and other assets involved. Other assets may include pensions, investments, other properties and savings and workplace bonuses and commissions.
The courts will also consider what each spouse earns and what their earning potential is, plus any outstanding debts or financial commitments that exist.
How the family home is split
The family home is one of the most significant aspects of a financial settlement in divorce. Not only will it impact you, but also your children. Here are some options for dividing the property:
- Sell
One of the most popular choices is for couples to sell their home in the event of a divorce. In this case, both parties will move out of the home and any equity within it will be shared equally. The funds can be then used for a deposit on a new mortgage or for a new rental agreement for each.
- Buy out
A transfer of equity is another common route often used if there are children involved in the divorce. The house is valued and one of the parties pays the other the agreed buyout fee and their name is removed from the mortgage while the remaining party stays in the home and owns it solely.
- Keep the home
In some instances, it may make sense to keep the home, keeping joint ownership intact. This can often happen if there are children under the age of 18 living in the house. Upon reaching their 18th birthday the house is then sold.
- Share the home
Although sharing a home following a divorce is rare, it can prove beneficial for some estranged couples, typically those who have been able to maintain a friendship or remain on good terms. It may also be a good temporary solution if, due to financial constraints, both spouses are unable to fund setting up a new home.
In conclusion
What happens to property after a divorce is hugely dependent on individual circumstances. What other matrimonial assets there are, how many dependent children live with you, what your financial situation is and the nature of your relationship’s breakdown will determine the ultimate outcome. Understanding more about how your assets are divided will help you know what you can expect and how to negotiate from the start.