Florida couples that are considering a divorce or already in the process may find difficulty unwinding the financial entanglements related to the family home. Because a home purchased during the term of the marriage will be considered a marital asset, it must be divided in a way that is fair and equitable to both parties. However, in the realistic sense, a house is difficult to divide. This is especially true when one member of the former couple wishes to remain in the home.
If the divorcing couple chooses to sell the home, pay the mortgage, and then divide the remainder, then this can be relatively straightforward. However, if one of the former spouses wants to keep living there, then the only realistic path forward is to refinance the mortgage in that person’s name alone. This can be a challenge due to the difficult financial situation that accompanies many divorces.
However, if refinancing can be worked out, then the leaving partner can sign a quitclaim and have themselves removed from the deed once they have been financially extricated from the situation. The quitclaim involves no money in and of itself, as it is only a witnessed transfer of the right of ownership. However, the quitclaim will not automatically absolve the partner transferring ownership of any debts related to the property, so it is advisable to make sure the financial details of refinancing are completed first.
Property division is often one of the most difficult issues when a marriage ends. Besides the family home, there may be artwork, antiques and investments to take into account. Florida is an equitable distribution state, and as such, judges will divide marital property in a manner that they deem fair. However, this could end up in a result that leaves both estranged spouses dissatisfied, which is why many couples choose to negotiate a property settlement agreement with the assistance of their respective attorneys.
Source: Total Mortgage, “How to Handle the House During a Divorce”, Thomas Bepko, June 22, 2016