Of all the details divorcing couples in Texas must handle, one of the biggest is what to do with the home they shared. This decision is usually the most significant aspect of the property division process, and comes with a host of emotional and financial considerations.
One of the first things a divorcing couple must decide in regards to their home, if they own it, is whether to sell it or have one spouse hold on to it. Couples with young children often want to keep the house and continue living there until the children are grown and head off to college. This decision can help maintain some routine and stability for the children and parent staying there, but it also requires the custodial parent to be able to afford the payments on a lowered household income.
Parents who decide they want to keep owning and living in the family home should take an honest look at their new income and determine whether they can still afford it, especially considering that beyond the mortgage, other costs have to be covered by that reduced household income, too.
If the spouse decides that making the payments will be too big of a struggle, the best decision may be to sell it and divide the proceeds between the couple. If the payments are expected to be manageable, the couple can refinance the mortgage and remove the moving out spouse’s name from the title. But there’s another option for Texans who want to keep the home in the family, at least until the kids have moved out. With a contract called an Owelty Lien Agreement, one spouse owns the house, but the other holds onto rights to any equity in the home at the time the agreement is signed. Then, when the house is ultimately sold, that spouse is awarded his or her share of the equity.
These transactions can quickly become complicated and are just one part of the property division process. A good divorce attorney can help walk you through that process and make sure that both your family’s financial and emotional needs are being addressed when it comes to dealing with your home and other property.
Source: Pegasus News, “Separating collateral: How to deal with a second home during divorce,” Candy Evans, Oct. 1, 2012
· Our firm handles situations like the one described in this post. To learn more about our practice, please visit our Dallas property division page.