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Sharing the Marital Residence after the Divorce is Final


Dividing the marital residence in a divorce is complicated by the parties’ sentimental attachment to the house and by the logistical hurdles people have to jump through when dealing with the house. This blog is the last of three discussing issues to consider when deciding what to do with the marital residence. This particular blog discusses what to do if you and your spouse are going to keep the house and share it after the divorce is final. The first talked about issues to consider when you and your spouse are selling the marital residence. The second in the series discussed issues related to transferring the house to one of the parties.

Courts generally prefer to separate the parties as much as possible when they are divorcing. Therefore, it is rare for parties to agree that they will both own the marital residence after the divorce is final. There are some circumstances where that option makes good sense for the parties, but if they choose that option, it is important that they have clear agreements regarding who will be responsible for the various expenses associated with the home, who will be responsible for maintenance of the home, and how the equity in the home will ultimately be divided when the parties no longer own the home. In this blog, we will discuss some of the circumstances where co-owning the home might make sense and some of the terms that the parties need to negotiate to make co-ownership feasible.

One reason that may cause parties to decide to keep a home together after the divorce include situations where the parties want the children to be able to stay in the home for some time after the divorce and the parent who will be staying in the home cannot afford to refinance or take on the home without the other spouse’s help. For example, some parties agree that they will keep the home until the youngest child graduates from high school and then sell the house.

Another reason that some parties decide to co-own the home after divorce is if the parents are exercising a nesting parenting time schedule in which the children remain in the home and the parents alternate who is in the home with them. This type of plan is sometimes used if the parties have a child with special needs that require the home itself to be adapted to accommodate the child’s needs. Nesting schedules are not very common, but they are sometimes essential.

A third reason that parties may decide to keep the marital residence is to convert it to an investment property and share the proceeds from that property in some way.

In each of those cases, the parties need to have clear agreements regarding the logistics of co-owning a property before the divorce finalizes. Generally, that means that they need orders regarding who is responsible for physically maintaining the home (cleaning, repairing, landscaping, lawn-mowing, etc.). The parties need agreements regarding who will pay the mortgage, utilities, costs of repair, etc. They also need clear language regarding who has the right to access or enter the property at any given time, which is not necessarily the same as who has legal title.

In addition, it must be very clear from the beginning how equity in the property will be allocated once the property is eventually sold. Will the party who is paying the mortgage and other expenses receive a greater portion of equity when the property sells because they are improving the value of the home by paying down the mortgage? If one of the parties spends money to improve the property, will they get any of that money back? Making these agreements before the decree is final will help the parties navigate the complexities of trying to own and manage a home together once they are divorced.

Finally, the parties need to work out how taxes related to the property will be paid, including claiming mortgage interest and other deductions and claiming any income that may be received by using the property as a rental or investment property.

If you are struggling with what to do with the marital residence or if you are trying to work out some of these terms with your spouse, you may want to speak with an attorney for guidance. Please also check out Parts 1 and 2 of this blog.

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