Splitting assets in divorce often becomes more complicated as the length of the marriage increases. This is particularly true when children come along. The family home often poses the greatest challenge.
Firstly, it is a place of stability for children. Secondly, it often has a significant financial value. Thirdly, it is often mortgaged. All these factors need to be taken into consideration when deciding what to do with it.
When possible, the children get the house
The children may not get legal ownership of the house, but, when possible, they will be allowed to go on living in it. This means that the person who has the right to go on living in the house will be the person who has physical custody of the children.
They may not necessarily be awarded full ownership of the house. For example, it is technically possible that they may only be given the right to live in it until the youngest child is an adult, after which it would be sold.
This approach does, however, raise further complications. In particular, it means that the youngest child would be forced to find (and pay for) somewhere else to live as soon as they reached their legal majority.
Either party could have a claim on the equity in the property
The job of the courts is to oversee a fair division of assets, of which the property will be one. What this means in practice will depend on the circumstances.
For example, where there are sufficient other assets, the court may give one party the family home and the other party the other assets to achieve fairness. A more likely scenario, however, is that the value of the other assets will be used to offset a percentage of one partner’s share of the equity in the family home.
This would, however, only be a practical solution if the other partner could afford to buy them out of their remaining share of the equity. Realistically, for most people, that is going to depend on their ability to get a mortgage.
Mortgages and divorce
If the property was bought on a standard residential mortgage and the departing partner’s name was on the mortgage, then it is very likely that the mortgage terms and conditions will require that partner to use the property as their main residence.
Depending on the situation, it may be possible to persuade the mortgage-lender to waive this condition. If not, then the partner who stays in the property will need to get a mortgage in their own name.
Sometimes nobody gets the house
Even when there are children, a court cannot award someone a house if it is obvious that they cannot afford it after a divorce.
For example, if a couple were financially-stretched anyway, then the impact of a divorce might make it impossible for either party to finance a mortgage on their own. That being so, a court is likely to order that the house be sold and the proceeds split in an agreed manner.
Kerry Smith is the Head of Family Law at K J Smith Solicitors. K J Smith Solicitors are experienced family solicitors in the Thames Valley area specialising in family mediation, estate planning and divorce and separation.