In California, the cost of real estate can be astronomical. This is why so many people go in with their partner when making such large investments, and it’s not unusual for married couples to have shared equity of a home or property.
This can lead to complications if and when divorce is on the table. We at R & S Law Group, LLP, are familiar with these types of cases and can vouch for how messy they can get. To help give you an idea of what to expect, we’re going over the main approaches that couples usually work with in order to handle home equity during a divorce.
One Party Buys Out the Other
When someone has an attachment to the house and wishes to retain ownership over it, one option is to have that person buy their ex out of the equity. This often works by refinancing the mortgage in a way that removes the other person’s name from the deed entirely.
The Property is Sold and Equity is Split Evenly
Another option that allows for a clean break involves selling the property and having the equity split equally among all involved parties. This is a popular option that typically provides enough income for both parties to secure a down payment for their own home or apartment.
Both Parties Continue “Holding On” to the Property
In some cases, we’ve seen couples decide that logistically, it makes more sense for both of them to continue staying in the house. This can apply to situations where the kids are college-bound, or where both individuals are able to remain civil in close quarters.
This option carries significant financial benefits, but in most cases it is not an adequate long-term solution. In these situations, we recommend that you seek the counsel of a qualified attorney.
In general, it’s a good idea to take the time to speak with a qualified legal professional. House equity can significantly raise the stakes in any divorce proceeding. Moving forward without fully understanding your options could place your investment at risk, especially if the soon to be ex has his or her own plans.
These are just some of the top ways that you can expect to negotiate any matters involving home equity during your California divorce. To learn more about this topic, or to connect with a qualified family law attorney, we invite you to reach out to us directly at (949) 825-5245.