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Who Gets the House?

dupage-divorce-who-gets-houseAnswer: The wife does not get the house as frequently as myth would have us believe. The marital residence is dealt with in different ways depending on some of the following variables:

  • The length of the marriage;
  • The amount of equity in the home;
  • The ages of the children;
  • The ability of the wife to afford the home after the divorce;
  • The intensity of the desire of either or both parties for the home;
  • The amount of the other assets available to offset the residence being awarded to one party or the other;
  • The ability of the other party to buy other housing after the divorce;
  • The income of the husband;
  • The income of the wife;
  • What other property was awarded to the husband;
  • What other property was awarded to the wife;

…modern lending trends have made it difficult for a divorced person to be able to buy a new home while he or she is still theoretically responsible for mortgage payments on the marital home.

The Court does not generally order one party to buyout the other party’s interest in the residence. If the parties are unable to agree upon what they are going to do with the residence, the Court will treat it like any other marital asset and award a percentage of the ownership to each of the spouses. This invariably causes a sale of the home with each of the parties getting his and her respective share of the net proceeds from the sale.

If the equity in the home is large and there are no enough offsetting assets to award to the other party, it will be difficult for the party receiving the home to be able to buyout the other party’s interest.

If, on the other hand, the other party is receiving significant assets from the divorce (such as a pension, 401(K), IRA’s, profit sharing, savings, savings, stocks, bonds, mutual funds, a summer home or other residential property of the parties), then the party that wants the home will be able to trade his or her interest in any of the these properties in order to acquire sole ownership of the residence.

It is obviously preferable for the children to be able to remain in the only world that they know (same house, same neighborhood, same school, same classmates, same playmates, etc.), but we know that this is not always possible.

It is much easier for an attorney to be able to keep his client and the children in the home if they are older and the completion of high school is insight. If the parties agree to this, the husband will bet paid for his share of the home at the time the house is sold. This is customarily accomplished by one of the following methods:

  1. The husband receives a percentage of the net proceeds from the sale including any appreciation in the value of the home that may have taken place since the divorce. In this case, the husband would be responsible to contribute toward the necessary repairs to the home during that time, but would not have to contribute toward house payments or general upkeep expenses.
  2. The husband deeds over his interest in the home to the wife at the time of the divorce and takes back a second mortgage from the wife in a fixed dollar amount, which he will receive at the time of the sale. In this case, the husband does not contribute toward any expenses of the home and receives a fixed amount despite any increase in the value of the home at the time of the divorce to the time of the sale.
  3. The wife stays in the house, the husband stays on title and the wife agrees to refinance the house within a certain time, and then pay husband an agreed sum in exchange for his deed.

It must be noted that modern lending trends have made it difficult for a spouse to be able to buy a new home while he or she is still theoretically responsible for the mortgage payments on the marital home. This problem is eliminated if the spouse can refinance the home and buyout the other spouse at the time of the divorce.

Often, however, it is the custodial spouse that remains in the home and he or she may not have enough income in order to be able to refinance. Lending institutions will include the amount of maintenance (alimony) when determining that person’s income. Lending institutions will generally accept a cosigner for such refinancing.

In short, if the Court decides what is going to happen with the home, it will most likely wind-up being sold. However, if the parties reach an agreement about what to do with their home, their agreement may be as creative as they and their attorneys can be imaginative.

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Richard and Kari are staunch advocates of the non-court approach to divorce, and are also active and seasoned litigators with over 60 years of combined trial experience in the Illinois divorce courts of Cook, DuPage, and Will counties.

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