When a couple has substantial assets, the division of property requires some of the most important decisions in an Illinois divorce. The decisions you make about assets such as your marital home can make a significant difference to your long-term security. Decisions about real estate in a divorce are particularly complicated due to issues including the mortgage, the property taxes, the real estate market, the property’s condition, and the exact value of your equity. It is important to consider all of these factors before making a decision about whether you should buy out your spouse’s share or sell the property and divide the proceeds.
Here are some variables to consider before making a decision about your marital home.
Can you sell the house for enough money to pay off the mortgage, the realtor, and other selling costs? Consult several realtors to determine a listing price for the house and to get advice regarding any repairs you should make prior to putting the home on the market. If you can sell quickly without taking a loss, this may be the smart thing to do, even if there will not be much in the way of proceeds to split. If you decide to go this route, here are a few tips to keep in mind:
Get an agreement in writing regarding each spouse’s responsibility for paying the mortgage, property taxes, insurance, and other bills.
The spouse living in the home must agree to maintain the home in good condition until it sells and to cooperate with the realtor.
Close the sale before the divorce is finalized. As long as both spouses remain on the title and mortgage, both are liable for those costs. Also, if you anticipate a large capital gain on the sale, the tax exemption is $500,000 for a couple (versus just $250,000 for an individual seller).
Can one spouse afford to take on full responsibility for the home? If you have school-age children, the spouse who will have the primary residence of the children may want to keep the home so as to give the children stability and allow them to remain in the same schools. This may or may not be feasible depending on your answers to these questions:
What is the value of the equity in the home? If the current value of the home is disputed, consider having each spouse choose an appraiser, have the two appraisers select a third one, and then average the three appraisals.
If there is a mortgage on the home, will the lender allow one spouse to assume full liability? If not, the spouse wanting to keep the house may have to apply for a new mortgage.
How will one spouse buy out the other’s share? For example, one spouse might keep a greater share of joint savings or retirement accounts in exchange for the other spouse keeping the home.
Will the spouse keeping the home be able to afford the mortgage, taxes, and upkeep?
If you are able to agree on a fair division of property that lets one spouse keep the house, make sure the other’s name is removed from the title and mortgage before the divorce is finalized or as soon as possible thereafter.
Be sure you understand all of the consequences before making a decision about your marital home. Whether one spouse chooses to buy out the other or you agree to sell the property and divide the proceeds, there can be significant liabilities to consider. Our DuPage County divorce attorneys can explain the financial, tax, and legal implications of each choice. Call Mevorah Law Offices LLC at 630-932-9100 for a free initial consultation.
Whether you are going through a divorce, injured in an accident, need to file a workers' compensation claim, charged with a crime, immigrating to the United States, or need to file for bankruptcy, Mevorah Law Offices LLC can help. Our trial lawyers have over 40 years of experience helping clients throughout Northern Illinois from five offices in Lombard, Bloomindale, Naperville, St. Charles, and Chicago.
Steven Mevorah has assembled experienced attorneys under one roof so that his clients need not search for a new attorney each time they need help. Mr. Mevorah has also established a wide network of additional attorneys so that his clients merely need to stop by Mevorah Law Offices LLC to find the attorney they need.
Our practice is focused on meeting your needs with flexible hours and locations to serve you: