The process of divorce requires couples to separate their lives from one another. This involves dividing any assets they have between the two of them. This is rarely an easy process, as spouses often do not want to give up things they cherish. This can include a family home. In most cases, spouses wonder what will happen to their house during the division of assets. When a house is considered marital property, it is subject to equitable distribution and can be divided. However, how is this done? Continue reading below to learn more.
When is a House Considered Marital Property?
Assets are considered marital property when they are bought or acquired throughout the duration of a marriage. If a couple buys a home together when they are married, it is marital property and therefore is subject to equitable distribution. However, if a spouse owned the house before the marriage and did not put the other spouse’s name on the title, it is considered separate property. In a divorce, separate property is not subject to equitable distribution.
How is a House Distributed Equitably?
There are three different ways to equitably distribute a home in a New Jersey divorce. This includes:
- Arrange a buyout. One spouse can buy out the other spouse’s equity in the home. The buying spouse can arrange to refinance the loan, the selling spouse can receive their share of the equity, and the loan will be in only the buying spouse’s name.
- Selling the house. This is the easiest option due to the fact that most spouses cannot afford to buy out the other and keep up with the costs of a home. The proceeds of the house can be divided equally or unequally depending on the situation.
- Continue to co-own the house. This is common when the couple has children together, as they can benefit from staying in the same home. In these situations, one spouse usually moves out and waits before the house is sold.
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