New York courts use equitable distribution to divide marital property during a divorce. Equitable means fair, but not necessarily equal. Courts look at several factors, weighing what each spouse brought to the marriage and what each party needs to move on after.
Marital property is usually all assets acquired during the marriage regardless of whose name it’s listed under. The court considers the family home along with other tangible and intangible items, such as income, benefits and debts.
Three options for dividing the house
While separating cash and other property can be straightforward, a home has memories and emotional ties and is usually one of the most complicated assets to divide. There are three primary options for spouses:
- Sell and split the proceeds: This can be the cleanest way for both parties to move on. The house is listed, and former spouses divide the equity. However, make sure you understand whether the sale is subject to capital gains taxes and that your credit and finances are in good order to find a new home.
- One buys out the other: When one spouse wants to stay, it can make sense to purchase the other party’s equity. Both should have their own appraisals done and agree on a price. The remaining spouse can take out a new mortgage, providing they can handle payments and other associated expenses.
- Joint ownership: In some cases, especially where minor children remain at home, former spouses retain ownership even though one party may no longer live there, and both share household expenses. Then, once the children leave the nest, spouses can sell and split the proceeds, or buy out the other.
Consider creative solutions with experienced representation
It’s advisable to work with an experienced family law attorney during a divorce. Dividing property, such as the family home, can be complicated, and your attorney understands how to factor taxes and other liabilities into the divorce agreement.
Your lawyer can also help you consider other creative options, such as trading different types of marital property, which could include retirement benefits, instead of coming up with the cash to buy out your former spouse.