When going through a divorce, many people are unsure as to what to with your marital property, in particular the marital residence. In Georgia divorce cases, the marital home and other pieces of marital assets tend to be the largest assets that spouses have to deal with at the time of divorce. This article is going to highlight the options available to you and your spouse in deciding on the marital property division. If you and your spouse can agree regarding the marital property division, the court will likely approve the settlement agreement. However, if you and your spouse cannot come to a sound agreement in regards to marital property division, then the court will determine the division of the marital assets, at its own discretion. Under Georgia law, marital assets are divided on the basis of equitable division. When dividing the marital property under equitable division theory, the court assesses several factors. See Stokes v. Stokes 246 GA 765 (1980):
- Length of the marriage
- Age, health, employability of each spouse
- Source of income
- Opportunity for each spouse to earn an income in the future
- Opportunity for each spouse to acquire property in future
- Debts against the property
Often time, the spouses struggle when it comes to determining the options available pertaining to marital property division, with the marital home usually being the primary marital asset.
Selling the Home
Selling the home might be an option available to you at time of the divorce. Those who are not interested in keeping their marital home or those who cannot afford the house favor this option. If you go with this option, you can decide as to specifics of the sale, and the desired price of the sale. The procedure of selling the marital home is in itself a lengthy process, and once you decide on selling the home, it is advised to consult a professional with the sound expertise in real estate law. Once the house is sold, the profits are to be divided between the spouses.
However, if this is not an option that you are comfortable with, the proceeds from the sale can be distributed to one spouse in the form of property settlement or spousal support. If you think this may be the right option, do keep in mind that before the process is even initiated, the mortgage and the other costs associated with selling the house is required to be paid off. Lastly, it is important to consider whether you will financially benefit by keeping the residential property. Keeping a home that you cannot financially afford or maintain after the divorce is finalized is a hardship that should be avoided.
One Spouse Keeps the Home for a Definite Period of Time and Then Home is Sold at a Later Date
Another option available is for the spouse to have full exclusive use of the marital property for a specified period of time. If minor children are involved, and you wish to have children grow up in the marital estate, then this may be an option to consider. Prior to the spouse staying in the marital residence, it is advised to have payment plan in place related to the marital property. It is not uncommon to have spouses agree that the party living in the marital residence will be responsible for paying mortgage, property taxes, utilities, and routine repairs. Spouse who keeps the home often have to take out a new mortgage. However, there are always exceptions. The spouses may agree to share expenses, and the spouse not in possession of the marital property may pay for the cost of child support or alimony. The settlement agreement can be crafted in a manner to meet the particular needs of the family.
Due to the current state of the housing market, the spouse who takes the possession of the marital home, until both spouses at a later date determine it is time to sell the marital property. In such cases, the Settlement Agreement must specify which spouse will remain in the house, which spouse will be required to pay the mortgage on the house, which spouse will be responsible for maintenance, the date the home will be placed back on the market, the listing price determination procedure, and the allocation of profits after the division of marital property.
One Spouse Keeping the Home Indefinitely
It is also possible for one spouse to keep the marital residence and buy out the other spouse’s share. Under the court ordered marital settlement agreement, the entire interest in the marital home makes the spouse responsible for paying future mortgage payments on the property. This does not relieve the liability of the other spouse to make mortgage payments on the property. If the agreement lists both spouses as the borrowers, the spouse may still be held liable for mortgage payments, even if the spouse is no longer in the possession.
Divorce Settlement Agreement or Marital Dissolution Agreement
When you do come to an agreement as to whether you or your spouse remain in the marital property, or if you are going to sell the marital residence, the agreement must be reduced to writing in form of Divorce Settlement Agreement, also known as a Marital Dissolution Agreement. Under a Divorce Settlement Agreement, the terms regarding the disposition of any marital real property should specifically list the party that will be occupying the marital residence, duration of the occupancy, and the financial opportunities associated with the marital home including but not limited to:
- property taxes
- homeowner’s association fees
In addition, most court’s will require a detailed agreement that includes a deadline date for the person keeping the home to refinance it if the parties are joint on one or more mortgages.
One of the most common sources of conflict during a divorce proceeding is what to do with the marital residence, as the marital residence, unlike other assets, often carries a sentimental value. Thus, it makes it harder for spouses to determine what to do with the marital property at the time of divorce. Therefore, it is very important to carefully assess the options that may be available to you and your spouse in determining the proper course of action in determining the status of your marital residence.
You do not have to make this decision alone. An experienced and qualified divorce attorney can help you determine your right course of action and help you make a sound decision. Contact us at 770-609-1247 to discuss your case and schedule a consultation.