For many families, their home is their primary asset.   Because of that, figuring out what to do with the house and the house equity can be a challenge for some divorcing couples.  When we help guide a family during a divorce, our first step is always to gather information.  We want to figure out how much the house is worth, the amount of any mortgage(s) on the house, and what funds were used to purchase the house. 

Often, couples purchased their family home during their marriage and all of the equity that they’ve earned is considered part of the marital estate. However, sometimes we work with families where one of the spouses owned the home prior to marriage, premarital funds were used to purchase the home, or inherited money was contributed to the home’s purchase or mortgage paydown.  In these situations, we work with the couple to determine how much of the house equity should be considered part of the marital estate. 

If you or your spouse owned a home prior to your marriage but still had a mortgage at the time of marriage, we will want to figure out how much your mortgage was at the time of your marriage.  With that information, we can figure out how much of your equity should be set aside as premarital and how much of your equity is considered marital.

Computing the marital portion of your equity can get more complicated when there has been a refinance. If you refinanced your mortgage during the marriage and pulled out a portion (or all) of any premarital or nonmarital equity, we will need to determine how much (if any) premarital or nonmarital equity remains. Our goal is always to obtain enough information so that people feel comfortable talking about the home’s equity and how it might be divided.

After we determine how to divide the marital equity, we’ll also talk about timing for the payment, the options on how to free up the funds for the payment and consider what other assets may be considered in the determination of the aforementioned.  If you’re not sure of your options, we’ll help explain them to you!

While determining what portion of a home’s equity is marital or not can be confusing, we can help!  Because of our vast experience and expertise, we can talk through the options with you and help you find a solution that contemplates the facts and what makes sense for your family.