Reducing the risks of holding onto the marital home post-divorce

The marital home is often at the center of divorce negotiations in California. For some couples ending a marriage, it’s a source of contention that results in a back and forth between lawyers or a final decision made by a judge. Other times, a soon-to-be-ex opts to let the other party buy out their share of the home’s ownership. Even when this gesture is meant to be an honest effort to make things easier for the other spouse, there may be unforeseen legal obligations associated with obtaining full ownership of the marital home.

If a home is in both spouses’ names, transfer of ownership during the divorce process may be done with a quit claim deed. While this can be an effective way to transfer ownership, loan responsibility will remain the same. If the spouse owning the home defaults on the loan, it could negatively impact the other spouse’s credit history. The marital home may also become burdensome if extensive repairs need to be made and the spouse who owns it can’t afford to pay for them. An unexpected decline in property value can also make the home a less desirable asset.

Owning the marital home may become more of a pro than a con if the spouse who gets it obtains a new loan. Also, the party owning the home may be better off if they approach the transaction as if they were purchasing the house from a random third party rather than a soon-to-be-ex. Doing so would allow any discovered costs to be equally split, which may prevent one spouse from feeling like they are being taken advantage of at a time when emotions tend to run high.

An attorney may help with situations involving complex property division, such as more than one marital home. Even if only a single home exists, a lawyer might suggest having the property inspected and appraised and running a second title search before documents are signed to make sure there are no unexpected issues prior to legally transferring ownership. However, divorce decrees or arrangements do not override existing creditor agreements.

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