Traditionally, divorcing couples had only a few choices when it came to dealing with the family home during a divorce. Often, one party bought out the other (using money or concessions) or the home was sold and any profits divided between the two. Nowadays, the price of real estate and rising interest rates on mortgages have some people getting creative with their housing issues during divorce. Read on to learn more.
You don't necessarily have to take action that involves selling the family home. Depending on your needs, your relationship, and your financial resources, one of the below alternatives might be perfect for your situation. All of the below points are based on an agreement to continue owning the home after the divorce. If you are renting, the same ideas can be applied.
Two Homes: One of you might move out and one of you stays in place. Often, the children will remain in place in the family home, and a visitation agreement covers visits.
Nesting: A variation on the above plan has the parents using two homes and moving back and forth according to a schedule. For example, one parent spends two weeks in the house with the children while the other parent stays in a nearby home. The parties trade places every two weeks.
Roommates: Here, both parties reside in the same home and have their own private spaces, along with some shared spaces. For example, one party might occupy a finished basement with a bed and bath, one party the master bedroom, and both parties share the kitchen and other common areas. Obviously, the parties should get along, and issues like new relationships and sleepovers with new partners should be discussed ahead of time, along with financial arrangements.
A plan that works for now may not work as well long-term, so plans to end the arrangement should be considered when the plan is created. Consider the following:
Milestones: You might assign an end time based on the child's age or graduation from high school or other milestones. For example, if one party is returning to college then you might target the completion of their degree to be an endpoint.
Time: In some cases, one party needs time to become more independent. Letting the housing arrangement expire in a year or two works well for some couples. For renters, the end date could be the end of the lease.
The Housing Market: You and your spouse might agree to end the arrangement and sell the home when the price reaches a certain price point.
Mutual Agreement: Including this provision gives the parties the flexibility to end the arrangement at any time.
The final consideration focuses on how to handle the home after the exit strategy. You might consider using the traditional plan of buying the other party out or selling the home. Often, the parties are in a better financial situation than they were right after the divorce, and they will be better prepared to deal with the housing issue. Speak to your divorce attorney to learn more about alternate housing arrangements.