How can collaborative divorce handle the family home?

Deciding what happens to your family home can affect your finances and living arrangements after divorce. In a Connecticut collaborative divorce, you and your spouse can compare options with help from your attorneys and, when appropriate, a neutral financial professional or another expert you both choose. This team-based process can help you evaluate whether selling, arranging a buyout or keeping the home temporarily is financially workable.

What can happen to your family home?

Connecticut courts may consider property owned by either spouse, regardless of when or how it was acquired. You can account for those circumstances while working toward a fair division, which does not always mean an equal split.

Common options for the family home include:

• Selling the home and dividing the money left after paying the mortgage and selling costs
• Arranging for one spouse to buy the other’s share based on the home’s value and mortgage balance
• Refinancing or getting the lender’s approval for one spouse to take over the loan
• Keeping the home jointly for a set period while sharing expenses

Each option may involve insurance, repairs, selling costs and deadlines. Selling may also raise tax questions, including whether federal rules allow you to exclude some of the profit and how the amount invested in the home affects any taxable gain. Your collaborative team can help you compare the costs and long-term effects of each option before you include it in an agreement.

Why the mortgage needs a separate plan

A divorce agreement or court order does not automatically remove someone’s responsibility for a mortgage. If both of you signed the loan, you generally remain responsible until the lender approves a refinance or allows one spouse to take over the loan and formally releases the other.

The deed, which shows who owns the home, is separate from the mortgage documents showing who must repay the loan. Changing ownership does not automatically release a borrower.

Build a workable agreement together

Collaborative divorce gives you and your spouse space to evaluate the family home before making a final decision. With guidance from your attorneys and other professionals when needed, you can create clear terms that reflect your financial circumstances and future needs.