Michigan Attorney Kathryn Wayne-Spindler recently participated in the Institute of Continuing Legal Education Family Law Seminar where Elizabeth K. Bransdorfer of Mika Meyes PLC in Grand Rapids presented the session, “Selling the Marital Home During the Divorce Case.”
When divorcing, there are a couple of typical scenarios regarding the marital home.
- One party continues to live in the family home. One of the spouses may “buy-out” the other spouse’s half of the family home. This can be in the form of trade-offs for other property, assets, income or a smaller share of the joint debts. In some cases, the parties may agree that the spouse remaining in the home must agree to put the house on the market after a certain time period and split the assets of the sale.
- The couple agrees to sell the home and split the equity. The divorce settlement quite often details the home sale specifics – such as timeline for listing; responsibilities for maintaining the property; agreed upon price and real estate agent. Occasionally, the couple agrees to put the home up for sale before the divorce is final.
There are some good reasons to consider selling the marital home during the marriage rather than after. Contact the Milford, Michigan law office of Kathryn Wayne-Spindler & Associates at 248-676-1000 for advice about your property division options.
Selling the Marital Home
Sometimes a divorcing couple decides that the large marital home may be too big and expensive for one partner to afford. If the couple needs the home equity from the marital home to be able to afford to move to two smaller homes, it is almost a necessity to complete the sale before the divorce. Spouses that need the home proceeds in order to get divorced may be extremely motivated to maintain and stage the home for the greatest common benefit. They may also be more apt to agree upon a price that will give them both what they need but be appealing to potential buyers as well.
While both parties are still living in the home, there is accountability for its maintenance and cleanliness. Sometimes when one spouse moves out during or after divorce, the spouse that remains in the home may benefit from prolonging the marketing process or even sabotaging the sale. Completing the sale while both parties are still living in the house ensures that both are taking good care of the shared asset.
There have been instances where the divorce settlement doesn’t adequately address the requirements for a timely post-divorce sale. It can be uncomfortable and expensive for an ex-spouse to have to go back to court to demand enforcement of a required sale when the other spouse is reticent to leave.
“Generally, you may be better off to sell the property while still married simply because you will be eligible for the $500,000 exclusion on capital gains. Once you are divorced the capital gain exclusion drops to $250,000 for each person individually. In these times with real estate prices as they are that may not be an issue but it is a valid consideration.” According to Financial Planner Steve Stanganelli.
Timing is everything
Depending on what’s going on in the real estate market, it might be advantageous to sell sooner than later. Completing a sale during a seller’s market may provide top dollar. Even if it’s a few months difference, it might be helpful to catch the Springtime house sale boom. Completing the sale during the preferred summertime months may allow buyers and sellers to get settled before school starts in the fall.
Keeps private details of the sale out of public record
Divorce records are public record. “While it is unlikely that a random person, or person with nefarious intent, will be combing through the court files looking for inside real estate information, people who know that the house is for sale, and a divorce is pending, might be curious. Having details of price, criteria for price adjustments, and the like could adversely affect the time on the market or the price received for the home.” According to ICLE (Institute of Continuing Legal Education) seminar by Elizabeth K. Bransdorfer titled, “Selling the Marital Home During the Divorce Case.”
Experienced Highland Township Attorney Kathryn Wayne-Spindler is thorough when it comes to helping clients compare their best real estate sale options before, during or after divorce. For help with a divorce or separation, contact the Milford, Michigan law office of Kathryn Wayne-Spindler & Associates at 248-676-1000. The family law and estate planning attorneys handle cases throughout Southeastern Michigan including Oakland, Washtenaw, Livingston, Genesee and Wayne counties. They help clients in Milford; Highland; Hartland; White Lake; Wixom; Commerce; Walled Lake; Waterford; West Bloomfield; Howell; Brighton; Linden; New Hudson; South Lyon; Fenton; Grand Blanc; Holly; and many more local communities.
Written and Posted by Christine Donlon Long, Communications’ Specialist for Kathryn Wayne-Spindler & Associates