People who are married often invest in a home, and it’s likely one of the largest assets they own. The asset that they worked hard to purchase can become a major source of contention if the couple decides to get a divorce. In Michigan, property is divided using equitable distribution, which means that all property must be divided according to what is fair.
There are several options to consider when you’re trying to determine what should happen to the marital home. There are three primary options to consider:
1. An equity buyout
In an equity buyout, one spouse purchases the other spouse’s share of equity in the home. This can be done with a cash payment, but it is sometimes done by moving around other assets and debts so that both parties receive equitable shares of the property.
2. A full sale and split
Another option is selling the property. In this case, the mortgage is paid and anything that is left can be used to pay the marital debts or be split between the spouses. This option can take time, and both parties must agree on the sale price of the home before it can be sold.
3. Co-ownership
Co-owning the home is another option. Parents will sometimes do this so the primary caregiver can remain in the home with the children. The terms of this agreement should be put in writing. There should also be an end date or end terms stated. Once that time comes, one spouse could buy out the other person’s share or the house will be sold.
It’s critical to think about how the division of the marital home interacts with the rest of the property division process. Working with someone who understands the situation and can assist with going through the options is beneficial.