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Dividing your home’s value in divorce

On Behalf of | Jan 24, 2024 | Divorce |

For many married couples in Florida, the family home is the single most valuable asset they own. When these couples divorce, dividing the value of the home can be a complicated task.

If you are in this position, you have three main options: sell the home; continue to own the home together, or have one spouse keep the home and purchase the other’s share. Which option you pick may depend on the details.

Marital or separate property?

Whichever option you pick, you must determine how much of the home’s value is marital property.

In a Florida divorce, the parties must divide all marital property in a way that is considered fair under state law. Generally, marital property refers to assets and debts acquired by the spouses during the marriage. An asset acquired by one spouse before the marriage may be considered separate property. Separate property is not subject to property division in divorce.

If you and your spouse purchased the home during the marriage, it is likely 100% marital property, even if the home is in just one of your names.

Alternatively, if one spouse owned the home before the marriage, the home could theoretically be considered separate property. However, if the home gained value during the marriage, a court will likely consider this equity to be marital property.

For example, let’s say one spouse purchased a home for $300,000 shortly before the marriage, and then both spouses lived in the home for 10 years during the marriage before they decided to divorce. At the time of the divorce, the home is worth $500,000. In this scenario, a court might find that $300,000 of the value of the home is separate property while $200,000 is marital property.

Getting the value of your home

If you sell the home, you can divide the proceeds according to the terms of your divorce. If you decide to remain a co-owner of the home with your ex, renting it out or otherwise, you can work out other terms. But if one of you decide that one of you will purchase the other’s share, you will need to determine the fair market value of the home.

For this purpose, it’s best to hire valuation experts who can compare your home to others in the area and estimate its value. Once you have that dollar figure, you can negotiate a purchase price.

This can be a complicated process in itself. To return to our earlier example, let’s say the home valuation experts say the home is worth $500,000, but you have determined that $200,000 of that is marital property. In this case, the price of one spouse buying the other’s share is based on a percentage of $200,000.

Of course, the calculations get more complicated if you still owe a mortgage on the home. But in any case, it’s not easy for most people to come up with the amount of cash necessary to buy out their ex’s share of the home value, and so they may choose to give them a greater share of other parts of the marital property instead. This can include valuable assets like retirement accounts and investment property.