Dear Claire: What Happens to a House in a Divorce?
Navigating Real Estate Transactions During Divorce: Considerations and Strategies
There are many ways to address dealing with a house in the midst of a divorce, and if you need a reference for a divorce attorney feel free to contact me. Whether the divorce is cordial or not, you’ll want to be sure to get the best legal advise possible.
If the divorce is cordial – you’re working it out, sitting down with a mediator and generally going to figure it out yourselves – you want to try to sell the house before for the divorce is filed. This ends up being a cleaner process for all parties involved. (We’ll address the alternative in the next paragraph). Through those initial negotiations maybe one person gets 75% and the other person gets 25%. Maybe it’s an easy 50/50 split. The house is often the most valuable asset that you own and getting that figured out as quickly as possible, is usually the most ideal scenario, otherwise the process could be more drawn out.
If you do not sell the house prior to proceeding with the divorce, it, along with everything else, has to be in a line item and could potentially be a longer process and more costly. This is my understanding, as I’m not a divorce attorney, so you should definitely hire divorce attorney. The line itemization process involves addressing all common assets and relationships – what’s going to happen with the primary house, the second vacation home, what’s going to happen with the kids? etc. And why this matter is that for the instance that both people get lawyers and the divorce is filed, most of the assets are temporarily frozen. And again, this is my understanding, as there’s a bunch of nuances that I don’t know about, because I’m not going a divorce the attorney. In essence, nothing can happen until you work out all those details of how everything is divided. Those details might be to agree to a 50/50 split on assets and then working out all the other stuff like the custody arrangement and childcare. But the thing that you need to know that you should always ask somebody (like a divorce attorney) about is how quickly can this process to be done? Is important to you to have the money from the house to be able to live, rent a new apartment, or buy another property? All of those things need to be considered before you go out and just quickly file for divorce because it sets things in motion that cannot easily be taken back.
I’ve talked to a lot of people recently that are doing no fault divorces through mediators in Portland. You can meet with a mediator and they help you work out all these details, which is incredibly helpful.
The big take away about real estate in general is that we can’t do anything that you can’t both agree on. So if you’re both on the title to the property, and you can’t agree on how the split goes, we can’t sell your house. The money and proceeds have to go somewhere once it’s finalized and we need to know from you where it goes, we can’t decide.
You need to address ahead of time is do we need this to happen soon? Do we want to wait? Can we work it out ourselves? Or Do we need somebody to help us? And can we make this a priority so that we can save other more complicated things, for instance, child custody arrangement for later?
As you can tell from this video, this is a very complicated subject so you want to consult with your CPA, your divorce attorney, of course, your real estate agent. I’m happy to participate in those conversations early so that you know what you’re getting involved in.
I hope you’re all staying safe and sane out there. If you have any questions that you would like me to comment on, comment below, I’d be happy to address them in the coming weeks. Take care and we’ll see you next week.
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