Divorce is a legal solution for those whose marriage has become untenable and/or unhappy. People who have combined households and lives will separate their property and their responsibilities from each other either through mutual agreement or via litigation in family court.
Making choices about property division is often one of the most stressful aspects of a Missouri divorce, and the biggest shared assets that couples have invested in during the marriage often become focal points for interpersonal conflict. Couples either decide how to split their property through cooperative negotiations or by asking a judge to rule on major decisions.
The marital home is probably worth far more than any other assets that the average Missouri couple shares. How do people fairly and reasonably divide the equity in a home during divorce in Missouri?
Spouses can share equity with each other
In all but the rarest of circumstances, only one spouse will retain possession of the marital home. In some cases, people agree to sell the home. Other times, one spouse will remain at the house after the divorce. In either scenario, both spouses would have an interest in the property and a right to an equitable share in the equity accrued during the marriage.
If the decision is to sell the property, then the spouses will share the proceeds after transferring the title to a new owner. If the outcome is instead to have one spouse stay in the home, possibly with the couple’s children, then the party retaining the home will often need to refinance. Doing so will allow them to withdraw some equity to compensate the other spouse for their interest in the property.
In some cases, other valuable assets, rather than equity from the home itself, will serve as compensation for the spouse not keeping the marital home. Couples may need to have the property appraised and to set aside their emotional attachment on negotiating property division matters so that they arrive at a reasonable solution given their shared assets and current financial circumstances.
With few exceptions, people can generally expect to need to share home equity with their spouse when they divorce unless they have a pre-existing agreement establishing the property as a separate asset of one spouse. Understanding how people handle their biggest assets may benefit those preparing for divorce proceedings in Missouri to make more informed decisions about their options.