Deciding How to Handle the Marital Home in a New Jersey Divorce
What can be Done with the House during a Divorce in Ringwood, Woodland Park, Little Falls, Haledon, and Northern NJ
A divorce completely turns your life upside down, but aside from sharing custody of children, few things upheave your day to day life more than selling and/or moving out of your home. The unease that comes with the prospect of selling or moving out of your home in a divorce is exacerbated when the decision feels as if it is out of your hands.
If you are thinking about filing for a divorce from your spouse or are currently going through a divorce in New Jersey, you likely have many questions about whether you may be able to stay in your home, what factors determine who gets the house in a divorce, and if there are any alternative options to having to sell your house.
Our New Jersey lawyers will explore all of these questions, but the outcome of your particular situation is really dependent on your unique circumstances. We encourage you to consult with a knowledgeable divorce lawyer at The Montanari Law Group to better understand your rights and learn about your specific options. We diligently work on behalf of divorcing clients in Wayne, Ridgewood, Caldwell, Montvale, Montclair and throughout Northern New Jersey, walking them through the entire process, preserving their interests, and keeping them informed and engaged in a collaborative approach to their best plans for the future. We take you and your family seriously at our Passaic county law firm. Place your trust in our caring team’s hands and call 973-233-4396 for a free consultation.
Marital Home? Marital Property? What do I Really Own?
A marital home refers to the home where a couple resided together during their marriage or owned as their primary residence. A home is considered to be marital property if it was co-owned by the spouses and/or acquired between the time the couple was married and the time their divorce became final. This is true even if the name of only one spouse was on the deed if the property was acquired during the marriage. The home may also be deemed marital property if the property was purchased by only one spouse before the couple was married, but then the other spouse moved in and paid the mortgage during the marriage or made substantial improvements to the property.
If the property was acquired by one spouse as an inheritance, then it will generally be deemed separate property unless the other spouse contributes to the value of the property and the asset becomes co-mingled. Then, the home may be deemed to be marital property, subject to equitable distribution during a divorce.
Handling the Marital Home When Dividing Marital Assets
In New Jersey, all marital property is divided equitably, subject to a rule called “equitable distribution.” When equitably distributing assets, the court does not necessarily divide the assets equally between the spouse, but rather equitably in the interests of fairness based on various factors, including but not limited to how long the marriage lasted, the age of each spouse, the parties’ standard of living while married, the value of property shared, the value of property brought into the marriage by each spouse, the parties’ debts, income and earning capacity of each spouse, and each spouse’s contribution to the other’s education or earning potential.
If the home is determined to be separate property, then it is not subject to equitable distribution. If the home is marital property, then all of the factors above will be considered in distributing the marital assets, including the marital home.
Three Possible Scenarios for the Marital Home
It is important to note that the parties can enter into a divorce settlement in which they agree on how to handle the marital home. Equitable distribution and the parties’ agreement do not necessarily consider only the monetary value of the property, but the parties may prioritize certain assets based on convenience or nostalgia. These factors can be considered more when the parties are able to negotiate and enter into an amicable settlement. When the parties are very contentious and cannot agree on anything, the fair market value of the home will be given the most weight when equitably distributing the assets according to the factors outlined above.
Depending on the parties’ unique circumstances and the total value of the marital assets, the parties may agree, or the court may order the parties to sell the home, arrange a buy-out of the home by one spouse from the other, or continue to co-own the home. When the total marital assets subject to division or other assets owned by either party are insufficient to fund a buy-out of the marital home, the parties must either sell the home, continue to co-own the home, or one spouse can agree to accept less so the other spouse can keep the marital home.
Of course, the last opinion is fairly uncommon and typically only results in a very amicable divorce where one spouse wishes their former spouse and usually children to remain living in the marital home, but other assets are insufficient for a buy-out.
Continuing to co-own a home after a divorce is also an option. This situation typically only happens in a very amicable divorce where both parties have some interest in maintaining ownership of the property because they have children who live in the home or they want to buy-out the spouse but cannot afford to yet and need some more time. Continued co-ownership may also be a wise temporary solution for parties who owe more on the property’s mortgage than the property is worth, and selling the property would create a financial expense.
When determining how to handle the division of the marital home, the parties must also consider the tax consequences of their decision. If the home is sold and substantial capital gains taxes are due, there must be a plan for how this tax liability will be handled and if the sale is still worthwhile when considered in the totality of the marital assets subject to equitable distribution.
Contact Woodland Park NJ Divorce Attorneys to Help on Either Side of the Housing Situation in a Divorce
When it comes to whether you will have to sell your home in a divorce, there is truly no one-size-fits-all answer. Strategizing a successful settlement proposal requires not only an understanding of New Jersey law but also the entire financial situation of each party and the financial consequences of each decision regarding the distribution of property in your divorce. Our team of New Jersey divorce lawyers bring a depth of legal and financial knowledge and experience to helping our clients navigate these complicated decisions and make the best decisions for their family in the long run. To set up a free consultation to speak with an attorney about your divorce case in Wanaque, Prospect Park, Millburn, Wyckoff, Fort Lee, West Milford, or elsewhere in Essex, Bergen, and Passaic County, contact our office today at 973-233-4396, or fill out our online contact form.