It is common knowledge that statistics show approximately 50% of all marriages will end in divorce. Divorce is a painful, legal process that can have a far-reaching impact if not handled carefully and with the right amount of expertise. It should not be attempted without counseling and some form of legal and financial aid, even if your money is tight. Divorce is a process that needs careful negotiating by professionals to ensure that both parties receive their fair share of the marital property.
Sometimes the divorcing couple’s home is their only large asset, so the division of this property should be carefully planned. This will ensure that both people will receive a fair share of the profits and all concerns are addressed. Consulting with a certified divorce specialist at this time can help the process run much smoother and without lingering problems.
If one ex-spouse is allowed to remain in the house for any length of time after the divorce, because of children or other personal reasons, this could cause problems in the future. The cost of maintenance of the house, property taxes, and other costs can cause tension and emotional distress. Even simple things like getting the lawn and shrubs trimmed and the garbage removed can generate a lot of anger and frustration between ex-spouses.
When the house is eventually sold the ex-spouse that does not live in the house can be required to pay capital gains tax on the profit from the sale. So even if the profits from the sale of the house are split equally, the ex-spouse that doesn’t live in the house can come away from the table with less money.
If the house depreciates in value during the period between the divorce and the actual sale of the house, this could create problems when it comes time to sell. If the house value drops below the amount of money owed on the mortgage, then the house can’t be sold for any profit. After the house is sold at a loss both ex-spouses will have to pay the rest of the money owed on the mortgage to satisfy the financial institution that holds the deed to the property. However, if the financial institution will agree, the house can be sold as a short sale and the bank will take the loss, instead of the mortgage holder. If you are in such a situation and want to investigate the possibility of a short sale, contact a knowledgeable certified divorce specialist. This professional will be able to guide you through the process of selling your house in a short sale so you will be free of the burden and can move on with your life.
If on the other hand, the house does happen to appreciate in value after the divorce, the property taxes could rise quite dramatically. If this happens the ex-spouse living in the home may be forced out if they can’t pay the bigger tax bill, unless the other ex-spouse agrees to help with the taxes. However, if the house does rise in value this means it can be sold for a larger price and there will be more profit to split between the ex-spouses. Keep in mind, this larger amount of profit will also mean larger capital gains taxes for the ex-spouse that has moved out and can't claim this house as a primary residence.
All of the above issues can dramatically affect the finances of two people going through the process of a divorce. Don’t try to navigate this difficult process of legal proceedings alone and allow your financial and credit standing be harmed. Contact a certified divorce specialist for help. Such an experienced professional will be able to answer all of your questions and concerns, as well as guide you to make the best decisions possible in your particular circumstances.
I am a certified divorce specialist and a best-selling author. My competent team of professionals and I can help you with the financial aspects when dealing with a divorce and can act as a mediator when dealing with the difficult sale of a house, such as a short sale. I can answer any pressing questions or concerns you may have about the process and discuss your best options, including the short sale of a home. I will also review and revise legal documents for mistakes or oversights that can harm you in the future.