When a couple decides to divorce, many issues need to be addressed, especially if they have been married for a long time. One such issue is how to divide marital property and assets. One of the most common questions in a divorce is “Who gets the house?” Illinois is an “equitable distribution” state, not a community property state. This means marital property, including debt, does not need to be divided “equally.” Instead, the law requires property to be divided "equitably." Your house (or houses if you own more than one) is probably the largest asset you and your spouse own, so it is imperative to divide it in a way that is fair to both spouses in a divorce.
Ways to Split Real Estate in a Divorce
Couples who are divorcing should keep in mind the sale of a home will likely have tax implications and therefore should be factored into the decision-making process. They should also consider what is in the best interest of the children if they have kids.
Options exist for division of real estate such as a house. Here are some clever tips for splitting a home or homes when going through a divorce:
- Buy out the other spouse's half of the house.
- Sell the house and split the profit.
- Keep the house until any children leave the nest, then sell and split the profit.
- Keep the house with your spouse and take turns living there.
A buyout works only if one spouse has enough cash to fund it, unless he or she qualifies for a new mortgage. It is important to note that spouses do not have to split the value of their home exactly in half. They can decide on the portions each receives from the sale.
If a couple sells and splits the proceeds of a house, they will not owe federal tax on the sale of the home if certain criteria is met, such as the value of the home is under $250,000 (if filing as single at tax time), or this was the main residence for at least two out of the past five years.
Typically, if a couple has children, one parent stays in the house with the children and the other parent moves to a different residence during or after the divorce. When the children leave for college or move out, the couple can sell the house and split the profit.
In some cases, each parent moves out and takes turns living at the marital home with the kids. The advantage to this situation is consistency for the children, but it can be very costly to maintain three residences. It is best to speak to an experienced legal team that can advise you on the best ways to divide real estate in your divorce.
Contact a St. Charles Family Law Attorney
Going through a divorce is not an easy process. If you and your spouse have real estate investments, the proceedings can be even more complicated. It is necessary to consult with a knowledgeable Geneva real estate division lawyer to learn how real estate property might impact your divorce. Call 630-200-4882 for a free consultation today.