One of the biggest benefits of divorce mediation is that the process helps separating couples create their own solutions rather than simply abiding by the decisions of a judge. This flexibility can be a boon when resolving many common divorce issues, including the issue of what to do with a family home. Mediation participants trying to make difficult decisions can explore multiple options and maintain control over eventual outcomes.
Answering Initial Questions
When considering what to do with a family home, try first to clarify what kind of asset the home is, as well as how decisions regarding the home may interact with other aspects of the divorce.
Is the home marital property, or is it the separate property of one spouse?
If the two of you purchased the home together during your marriage, then it is probably a marital asset. In New Jersey, marital assets are divided “equitably,” which means “fairly.” Spouses start out with equal rights, but statutory factors may entitle one spouse or the other to a greater share of the value.
If one of you purchased the home individually before your marriage, or if one of you received it as a gift or inheritance, then it may be the separate property of that spouse. The other spouse might still have a partial claim on the value, however, due to financial or other contributions. Contributions can be hard to evaluate. If you think that your home may not be marital property, consult with an attorney to be sure that you understand your rights.
Do you want to keep the home, or at least keep living in the home?
Sometimes the first step in a divorce involves one spouse moving out of the family home. If you want to keep the home, then it’s best not to move out and leave your spouse in possession. Moving out won’t affect your rights to a share of the value, but it could make a judge think that living there is not your top priority. Even if you are not particularly interested in keeping the home, think twice before moving out. Moving out will not absolve you from responsibility for ongoing home expenses, including mortgage payments, property taxes and utilities, and maintenance costs. Work out an agreement regarding payment of all such expenses with your spouse before either of you moves. Mediation can be a good venue for reaching this kind of agreement.
Do you have custody or visitation issues?
If you don’t care about keeping the home, but you do care about having primary or joint physical custody of children, then don’t move out without an enforceable custody agreement. Even if you are not planning to seek physical custody, a signed agreement with your spouse regarding temporary visitation can help prevent problems down the road. Mediation is also a good venue for resolving disagreements about both temporary and permanent custody and visitation.
Do you need to make temporary living arrangements?
Sometimes the only thing that is obvious at the outset is that neither party wishes to sell the home immediately. Perhaps the home has lost value, or perhaps the parties wish to keep their children in current schools. Separating couples often make temporary arrangements regarding a home before finalizing their divorce. These might include:
- Allowing one spouse to have temporary exclusive possession;
- Temporarily staking out separate living spaces; or
- Temporarily alternating residence in the home.
Mediation can be a good venue for making temporary arrangements, as well as for reaching final agreements.
Exploring Final Options
Upon final judgment of divorce, a judge will usually award the family home to one spouse or the other, or will order the parties to sell it and divide the proceeds. Judges can, however, order more creative solutions. The best way to achieve a creative solution that meets your needs is to agree between yourselves about what would work best, and then spell out the terms in a marital settlement agreement.
Options at final judgment include:
- Selling the home immediately and dividing the proceeds;
- Allowing one spouse to keep the home and “buy out” the other spouse’s share, either immediately or over time;
- Allowing one spouse to keep the home while the other receives other marital assets to offset the value; or
- Allowing one spouse to have exclusive possession for a predetermined time period, after which you agree to hold a deferred sale and divide the proceeds.
Factors that may be important to your decision include things like:
- What other marital assets you do or do not have available to offset the home’s value;
- Whether or not a spouse who wishes to keep the home has, or might eventually have, enough assets and/or credit to arrange a buy-out;
- What target home value you would like to see before putting the home on the market;
- Which parent is going to act as the residential custodian of children;
- Whether or not you wish to provide for a period of “nesting” (a usually temporary arrangement where children reside in the home while parents take turns staying elsewhere); and
- Whether or not (and for how long) it is important to keep children in the neighborhood for school purposes.
Issues regarding the family home are usually closely intertwined with other issues. These may be issues concerning employment, other assets, and/or children’s needs. Mediation can provide a forum for taking all of these circumstances into account and crafting an agreement that represents the best possible solutions for everyone in the family.