Should it Stay or Should it Go: The Marital Residence

The home that parties reside in during the course of the marriage is often referred to as the “marital residence”. The marital residence is a part of the marital estate and each party is entitled to an equitable division of marital property. Any equity, which is the fair market value less the mortgage balance, is subject to division between the parties. During the divorce proceedings, there are often questions as to who remains in the marital residence, what is the value, and whether or not the residence should be sold or awarded to one spouse.

During the pendency of the divorce, often times one spouse will move out of the marital residence as a result of the conflict that typically accompanies divorce; however, the timing of when one moves out is another area for contention at times especially when children are involved. If at the time that a Petition for Dissolution is filed both parties remain in the residence, it is often best that one party move out of the residence as soon as possible in order to avoid impending conflict or discomfort in the home, especially if children are involved who are likely to witness this.

Even though time may be of the essence for one party to leave the marital residence, even when there is an agreement it may be difficult to secure alternative housing, especially when there is a limitation of financial resources to pay for same. Parties may reach out to friends and family to see if they may temporarily reside there until a more permanent residence can be found. In choosing a temporary residence, it is important to keep in mind the geographical location and space, given that a party may have parenting time at this residence and the parent may need to continue to assume parental responsibilities such as transportation during this time.

In the best case scenario, parties come to an agreement as to who will remain in the marital residence, however, it is common that litigation ensues to determine who will have exclusive possession of the residence until a divorce is finalized. When determining which spouse should remain in the marital residence, when giving thought to the best interests of the children, it is a strong factor to consider that the primary caregiver remain in the residence with the minor children to maintain stability. If a temporary parenting time agreement is in place, this may be the parent with the majority of parenting time. Exclusive possession may further be necessary if there is domestic violence or an extremely high conflict divorce to ensure the parties do not come into unnecessary contact with one another.

The next question then becomes if the parties will sell the residence or if one party will “buy out” the other’s marital portion of the property and become the sole owner upon divorce. There are some considerations to take into account when determining if selling is the best option. If parties have a great deal of marital debt, the home has equity, and there are limited marital assets to pay the marital debt aside from the residence, then selling is often a strong option. Selling the home would then allow for the parties to pay the remaining marital debt and walk away with any remaining net amount from the sale, if there is any remaining. Often times, emotions also play a role in determining if selling the home is the best option. A person may feel attachment towards the marital residence, or a desire to leave the marital residence due to negative feeling surrounding the divorce. Children and their best interests often play a role as well if they have grown accustomed to the house, the neighborhood, and the school district, parents may be less inclined to sell. Although parties may wish to keep the residence, unfortunately, that is not always financially feasible. If neither party can afford to buy the other party out of their marital portion or afford the monthly carrying costs of the home, selling the marital residence is likely the only option.

When a spouse wishes to retain the marital residence, they may buy the other spouse out of their marital portion of the residence. Since the marital residence is considered to be a part of the marital estate, the spouse must compensate the other for the marital portion of the home. The marital portion is typically 50% of the equity of the home. To determine the fair market value of the residence, most parties will have an appraisal done by a neutral third party service. Although in Illinois, marital property is divided equitably, not equally, so the marital portion of the residence may not necessarily be an equal division. To afford to buy out the other party, most individuals will need to refinance the mortgage. A party will need to consult with their mortgage lender about refinancing to ensure that it is an available option.  By refinancing, the spouse who is being bought out will be released of the mortgage obligation.

The Law Office of Erin M. Wilson LLC is available to help you navigate the various options regarding the marital residence specifically as it relates to your circumstances. Contact The Law Office of Erin M. Wilson LCC to schedule a consultation at 312-767-4220.

NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.