Many people approaching divorce worry about losing their assets in the process – including the family home. In Michigan, the outcome of a divorce involving homeowners is rarely simple. A couple’s home is typically considered part of their marital estate, which means that the equity in that home has to be equitably divided.
There are several ways to handle a marital home in a divorce. Some couples choose to sell the property and divide the proceeds equitably. Others agree that one spouse will keep the home and buy out the other’s share. What works best for your situation will depend on several factors.
What must go into the equation when the family home is at stake
You do not have to remain living in the home to preserve your interest in it. However, it is important to avoid situations that could be interpreted as abandonment. While Michigan law does not require you to continue paying the mortgage or household expenses to maintain your rights, stopping contributions entirely can sometimes influence how a court views the division of that asset. Continuing to contribute to household bills and expenses, when possible, can help demonstrate ongoing interest in the property.
The practical realities of the division must be considered. One of the biggest questions is whether either spouse can realistically afford to keep the family home on their own. This includes not just the mortgage, but also taxes, insurance and maintenance costs. Therefore, it is critical to consider whether your income will support the costs of homeownership on your own. It is also important to determine whether buying out your spouse’s share of the equity is viable. To buy out your spouse’s interest, you will likely need to refinance the home or trade other assets in order to accomplish this goal.
If there are minor children involved, that can also factor into who keeps the family home. The parent who has primary physical custody of the children may have a stronger argument for retaining the home. It is never guaranteed, but the courts prefer to minimize the disruptions of a divorce for children and that can play a vital role.
When spouses can work cooperatively and come to their own agreement on the house and other issues involving their assets, they maintain more control over the result and avoid the uncertainty of litigation. If the matter goes before a judge, the final decision will be based on a broader assessment of fairness, which may not align with anybody’s preferences.
If you are considering divorce and are concerned about losing your home, speaking with one of our attorneys can help you understand your options and what outcomes are likely based on your specific situation.