The family home is often the most valuable asset that a couple owns, so it’s not surprising that it can be a significant point of contention during a divorce financial settlement, especially in regard to questions such as “Who stays in the family home after a divorce?”
Firstly, it is important to note that there is no one-size-fits-all answer to who stays in the house after a separation. Every separation and every financial settlement is unique and the outcome will depend on the individual specifics of each case. However, there are several options available to divorcing couples when it comes to dealing with the family home.
What are the options for dividing property during a divorce?
One spouse “buys out” the other
One of the most common options is for one spouse to buy out the other's share of the home. This means that one spouse then takes ownership of the property and pays the other spouse their share of the equity back. Equity refers to the difference between the value of the property and any outstanding mortgage or other debts secured against it.
For example, if the family home is worth £600,000 and there is a mortgage of £200,000, then the equity in the property is £400,000. If one spouse wants to keep the property and has the financial means to do so, they could buy out the other spouse's share of the equity (half of the equity), which would be £200,000 (assuming equal ownership of the property).
In some cases, the spouse who wishes to retain the property may have to remortgage the property in order to release equity so they can buy out the other spouse. This can be a complicated process and it is essential to seek advice from an experienced divorce solicitor before making any decisions.
Selling the property and splitting the proceeds
If the property is sold, any outstanding mortgage or other debts secured against it will need to be paid off first and the remaining proceeds will be split between the spouses according to their ownership share.
Offsetting the value of the property against other assets
Where one spouse has other significant assets, such as a pension or business interests, then their value could be offset against the value of that spouse’s share in the family home. So, for example, it could be decided that one spouse keeps a greater share of their pension assets in exchange for giving up their share of the house.
A common solution to how the family home is divided after divorce is for one spouse to continue living in the property until an agreed point, at which it will then be sold and the proceeds split. This is a popular option where there are young children who need a stable home, with the sale deferred until they have left home. A deferred sale can be ordered by a court with a ‘Mesher Order’.
What if children are involved?
When there are children involved in a divorce, who gets the house takes on even more significance. The courts will almost certainly take the welfare of the children into account when deciding what should happen to the family home. In some cases, the court can even order that the property is transferred into one spouse's name to provide stability on behalf of the children.
The court may also consider the financial needs of each spouse, particularly if one spouse is the primary caregiver for the children. In these cases, the court may order that one spouse has a larger share of the equity in the property to provide financial security for the children and the primary caregiver.
It is important to note that if the property is owned jointly, then both spouses are responsible for any outstanding mortgage or other debts secured against it. If one spouse defaults on the mortgage or other debts, then the other spouse could be held responsible for the full amount. This is why it is essential to seek legal advice from a divorce solicitor if you are unsure about your responsibilities regarding the family home.
What if I have a prenuptial agreement?
In some cases, a prenuptial agreement may have been made before the marriage that sets out what should happen to the family home in the event of a divorce. While prenuptial agreements are not legally binding in the UK, they can be considered by the courts when making decisions in regard to the division of assets.
There are multiple options available to divorcing couples when it comes to dealing with the family home. One of the most common options is for one spouse to buy out the other's share of the property or alternatively to sell the property and divide the proceeds between the spouses. The court will likely also take into account the welfare of any children involved and the financial needs of each spouse when making a decision about the family home. It is essential to seek legal and financial advice before making any decisions about the family home during a divorce.
The fate of the family home after a divorce in the UK will depend on the individual circumstances of each case. Whether one spouse buys out the other's share, the property is then sold and the proceeds are divided, or the courts make a decision, it is essential to seek legal and financial advice and to ensure the well-being of any children involved. While this can be a challenging process, finding a solution that works for both spouses can provide a sense of closure and help both parties move forward with their lives.
Consult our divorce solicitors in Banbury, Bicester and Rugby
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