SELLING THE HOUSE
For most divorcing couples, selling the house is the most practical solution. Selling a home is a complex and time- consuming process even under normal circumstances, and the emotional stress of divorce can make it even more overwhelming.
LEGAL CONSIDERATIONS
The dissolution of a marriage requires the division of marital property. Regardless of whose name is on the title, both spouses are typically entitled to an equitable share of the home’s value. Some couples have legal agreements in place that simplify property division, while others may use mediation to reach a fair settlement. If negotiations fail, the courts may need to intervene and decide the division of real property. As always, legal advice is crucial—this book is not a substitute for professional legal counsel. Many couples purchase a home based on a two-income household, covering mortgage payments, utilities, maintenance, and unexpected repairs. After a divorce, neither spouse may be in a financial position to assume full responsibility for the home. The most common reason for selling is to prevent mortgage default, which can have long-term credit consequences. Selling before the divorce is finalized can also offer financial benefits. Married couples who sell may qualify for the $500,000 $500,000 capital gains tax exclusion, whereas a divorced individual selling alone is typically eligible for only 50% of that exemption. Additional tax benefits may apply when substantial equity has accumulated over time. A tax professional or attorney can help determine the most advantageous time to sell.
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