Divorce and Real Estate in Washington State: Protecting Your Home

Divorce can be a tumultuous and emotionally draining process, with many critical decisions to be made regarding the division of assets. For property owners going through a divorce, one of the most significant concerns is the fate of the family home. This article will delve into the complexities of homeownership during divorce, addressing key questions and offering guidance on how to protect your home during this challenging time.

Deciding Home Ownership in Divorce: Key Factors to Consider

In Washington state, the division of assets during a divorce follows a “community property” system. This means that all assets and debts acquired during the marriage are considered joint property and are to be divided equitably between the spouses.

While an equitable division does not necessarily mean a 50/50 split, it aims to be fair and just for both parties. In some circumstances, property may be excluded from “community property” and remain in possession of one spouse. It can be advantageous to work with a Certified Real Estate Divorce Specialist (CREDS) and experienced divorce attorney to ensure that both parties’ interests are considered in the distribution of assets. When it comes to home ownership, in particular, the court considers several factors. These include:

  • The value of the home
  • The current mortgage balance
  • The income of each spouse
  • The financial contributions made by each spouse toward the home
  • The needs of any minors involved
  • The ability of each spouse to afford the home
  • The tax ramifications of selling the home
  • The emotional value of the home to each spouse
  • The court will also consider the potential for the home to appreciate in value over time.

Ultimately, it is up to the court to decide who will retain home ownership. If it is decided that one spouse will keep the home, they may be required to buy out the other spouse’s share or refinance the mortgage. Remember that the spouses may be able to negotiate an agreement that the court will accept on their own.

Dividing Premarital Property: Who Keeps the House?

Some circumstances may be different for property acquired before marriage. In most cases, the premarital property owned by either partner is not subject to division or will be awarded to its original owner. This includes any real estate such as a house, investments, or other assets acquired before the marriage.

However, if the premarital property was co-mingled during the marriage, then it may be subject to division. For example, if the premarital house was used as the marital residence, with the other partner making improvements or repairs, or if marital funds were used to make payments on the house, then the house may be subject to division.

In such cases, the court will consider the house’s value, each spouse’s contributions to its value, and the economic circumstances of each spouse to determine an equitable division of the property. The court may award the house to one spouse and award other assets or funds to the other spouse to make up for the difference in value.

Does Divorce Require Selling the Home?

There is no definitive answer to this question, as the home’s fate depends on the specific circumstances of the divorce. Some possible outcomes include:

  • One spouse buys out the other’s share of the property and retains ownership
  • Both spouses agree to sell the home and divide the proceeds equitably
  • The court ordered the sale of the property as part of the divorce settlement
  • One spouse being awarded the home, with the understanding that they will refinance the mortgage to remove the other spouse’s name

The ideal outcome will depend on each spouse’s financial situation, future housing needs, and the best interests of any children involved.

Pros and Cons of Selling Your House Before Divorce

Selling your house before divorcing may simplify the division of assets during the divorce process, but it is not always the best course of action. There are both pros and cons to consider.

Pros

  1. A pre-divorce sale can help speed up the divorce process, which can be beneficial for couples who want to move on quickly, helping to avoid the emotional turmoil that can accompany the process of dividing property.
  2. It may help avoid the financial strain that can accompany dividing property.
  3. It can also help avoid the potential legal complications that can arise when dividing property.

Cons

  1. Selling the home before a divorce can mean less money for both parties, as the home may not be able to be sold for the full market value.
  2. A pre-divorce sale can be complicated and time-consuming, as both parties must agree to the terms of the sale.
  3. It can be difficult for couples who have children and need to provide them with stability during the process or for couples who are emotionally attached to the home and its memories.

It is crucial to consider the tax implications, current real estate market conditions, and emotional attachment to the home before making such a decision. Consult with a financial advisor, Certified Real Estate Divorce Specialist (CREDS), and divorce attorney to determine the best strategy for your unique situation.

Safeguarding Your Home During a Divorce

Protecting your house during a divorce involves open communication, financial planning, and legal assistance. Here are some tips to help you protect your home:

  1. Open, Transparent Communication: It is important to discuss the future of the house with your soon-to-be ex-spouse. Make sure you both agree on what should happen to the house. Consider mediation services to help this process go smoothly.
  2. Financial Planning: If you are keeping the house, ensure you have the financial resources. Consider taking out a loan or refinancing the mortgage if necessary. You should also get an updated property appraisal to ensure you know its current value.
  3. Legal Assistance: Hire an experienced family law attorney to help you understand your rights and the legal implications of any decisions you make regarding the house. Your attorney can also help you ensure that your agreements are legally binding.
  4. Gathering Necessary Documents: Make sure you have all necessary documents related to the house, such as the deed, mortgage, and home insurance policy. You should also gather any other documents that may be relevant, such as any home improvement records, property tax information, or rental agreement if you are renting the property out.
  5. Document Everything: Make sure to document any agreements you make with your soon-to-be ex-spouse regarding the house. This includes written contracts, emails, or text messages. This will help ensure that you and your former spouse are held accountable for your decisions.

Why Certified Real Estate Divorce Specialists (CREDS) are Essential for Divorcing Homeowners

A Certified Real Estate Divorce Specialist (CREDS) can provide valuable guidance during this process and help to be a neutral party, and help both parties to navigate and communicate through the divorce process.

For more information on managing divorce, check out my podcast Divorce Confidential, or reach out any time to chat about your needs. I have a wealth of experience with divorcing clients who rave about the difference it made to have a divorce specialist on board through their divorce. Reach out for a consult or to chat about your questions anytime.

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Amy Alpeza Real Estate