Divorcing couples in Michigan often struggle to address the valuable property that they own together. For many families, their primary residence is their most valuable shared property. Spouses may have spent two decades or even longer building equity in their homes and making improvements to the property over the years.
The equity in the home where the couple lives could be the single biggest contributing factor to their personal wealth. What happens to a home during a divorce will, therefore, have a major impact on someone’s future financial stability. These are the three most common solutions for real property disputes in Michigan divorces.
1. Letting one spouse keep the home
There are multiple ways for a couple to facilitate one spouse’s retention of the home in a divorce. Often, the spouse that will keep the home refinances it and then uses the equity accrued in the property to compensate their spouse for their prior investment in the home. Other times, the person who doesn’t keep the home might receive other property instead, like a retirement account or sole ownership of the family business.
2. Selling the house
Perhaps neither spouse has a high enough income on their own to afford a mortgage, especially after withdrawing enough equity to repay their spouse for half of the home’s value. Maybe both spouses have strong negative feelings about the home where they lived during the marriage, meaning they both would prefer a fresh start. In some cases, it might even be the judge dividing the marital property who decides that it would be best for the couple to sell the house and divide its value.
3. Retaining joint ownership
In some cases, divorcing spouses agree that the best outcome involves them continuing to own the property jointly. Perhaps they have yet to finish a house remodel and recognize that they need to finish rehabbing the property to recoup their investment. Maybe it is hard to find homes in the school district that their children attend currently, so they will maintain the residence until the children graduate. Special agreements are often necessary to protect the interests of both spouses in scenarios where they choose continued joint ownership of their marital home or other real property.
Considering every option for dividing the value of significant marital property can benefit those who are trying to prepare for a Michigan divorce with the assistance of a legal professional.