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What to do with a house when you divorce

For many couples facing divorce, one of the most difficult issues to settle is who gets to keep the house - or whether to keep the house at all. In Utah, couples divide marital property under the equitable standard, which means that a court must consider a divorce settlement "fair" even if it is not equal.

While this standard does give couples some more room to negotiate (as opposed to the several states who use a stricter method of property division), it does not necessarily make things simpler.

For many couples, the house they bought is by far the largest asset they have between them, so finding a way to for one member of the couple to keep it makes fair property division difficult.

As with all divorces, couples who face this kind of difficult issue should strongly consider enlisting the guidance of an experienced attorney who can help them understand all of the implications of their divorce and ensure that they create a truly fair settlement, even if that means getting creative.

Keeping the house may be more difficult than you anticipate

One of the biggest issues with dividing up marital property is that it is not limited to assets, but also includes liabilities. If you and your spouse co-signed for the mortgage, then it is important to make sure that the original mortgage does not extend beyond your marriage.

If, for instance, you and your spouse agree that she should keep the home and you will retain the retirement savings, you do not want your financial future tied to her ability to continue to pay the mortgage that you cosigned. If she misses payments after you're divorced, or defaults on the mortgage, your credit may suffer.

On the other hand, if you are the one who is keeping the house, you must be sure that you can handle the financial burden of owning the home on a single income. If you keep the home but cannot make the payments, you may have gotten the poor end of the deal in your settlements, simply because you wanted to keep the home.

Even in cases where you have no mortgage payments, such as marriages that dissolve after many years together, that burden can be surprising. Can your single income account for the ongoing upkeep of the property and the associated taxes?

Keeping a home as a single person is not a simple matter, and requires a careful approach to ensure a fair settlement.

Selling the home is not always simple

Perhaps you and your spouse decide that neither of you can truly afford to keep the home, and that it is more of a liability than an asset in your divorce. Unfortunately, the divorce requires you to settle the issue.

A fair settlement accounts for all the assets and liabilities in a marriage, not only the convenient ones. If you choose to sell the property, then you may be looking at a net loss if the home cannot sell for enough to cover the remaining mortgage, or takes a long time to sell. In this case, you must work together to find a way to fairly divide the resulting debt.

You may also decide to keep the home and rent it as an income property. This might seem like a good idea if you are both cash poor and trying to just get to the other side of the divorce. However, this type of arrangement requires great caution. It is rarely wise to continue having financial interests with a former spouse - there are many opportunities for your ex to harm your finances out of spite or negligence.

Get the help you need to create a successful plan

Clearly, the issue of a marital home is often difficult to navigate. This is precisely why it is crucial to consult with an experienced, skilled attorney who can help you examine every aspect of your finances and marital property to create the most fair settlement for your circumstances.

An experienced attorney can protect the rights of both parties while ensuring that no important legal issues remain unaddressed, preparing you for a successful transition to a new chapter of life.

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