Divvying up the family home is never easy in a divorce. Both spouses will likely be emotionally attached to the residence, and neither of them may want to give up the property. Will one spouse keep the property and the other spouse move out? Will the property need to be liquidated and the proceeds divided?
Here are the five ways spouses will usually end up dividing the family home:
- Sell the property and split the proceeds as soon as they’re received.
- Keep the home and wait until the real estate market improves and sell the property then.
- Let one spouse purchase the other spouse’s property interest.
- Let one spouse take out a new mortgage to buy out the other spouse’s property interest.
- Divvy up other property in the marital estate so that one spouse can keep the family home and the other spouse receives his or her share of the property through other marital assets.
It’s always important to think about the potential for capital gains taxes whenever you’re dealing with the division of the family home in a divorce. If real estate values have gone up significantly, the home could come with a significant tax burden. If real estate values have gone down, the home may not have any tax burden — but rather a tax benefit — associated with it.
Never go into a divorce blind, and always be prepared with an in-depth understanding of Tennessee family law. Spouses who learn as much as they can about their marital property rights and their current financial situation before their divorce will be more capable of intelligently negotiating a fair settlement.
Source: FindLaw, “Divorce, Taxes, and Your Estate Plan,” accessed Jan. 05, 2018