Friday, November 8, 2019 / by Zifan Gao
Let’s talk about the matrimonial home. Usually, the term “matrimonial home” starts being used when a couple or one of the people in a marriage is contemplating separation or divorce. I’d like to share some information with you around the matrimonial home and perhaps dispel some myths.
First, I need to say that this is not legal advice. If you need a family law lawyer or mediators ask me for some names because we work with a couple of great professionals. The first myth is, despite what some people believe, that it won’t matter whose name the matrimonial home is registered to. Whether one of you owned it before you got married or you bought the home during your relationship or marriage, legally, you both own it jointly.
Determining matrimonial home status for vacation and other types of properties can be complicated. However, if this is the home you’ve been living in together, it will very likely be considered the matrimonial home for divorce purposes and its value will be divided between the two of you.
I’ve worked with a lot of divorcing and divorced couples, and while many start out by saying that one spouse is going to keep the matrimonial home, and various arrangements will be made, close to 100% of the time the house ends up being sold. It can be sold to your spouse, it can be sold to you (if you can buy it), or it can be sold to someone else. In each instance, the financial consideration for you can be very different.
Quite often, if you have children, you and your spouse may try to have one of you buy the matrimonial home from the other. There’s a sense of stability in taking that route, which many people think will benefit the kids. Professionals debate this because the kids’ lives are going to change either way and having one parent stay in the matrimonial home could give the kids a false sense of security. It can also end up painting one of the parents in a negative light in the kids’ eyes.
If you do want to consider one of you keeping the home, you need to figure out if that’s financially realistic. So here are three questions to ask yourself:
Can you or your spouse afford to keep the home?
Will that person qualify for a mortgage? Usually a larger mortgage than the one which may already exist?
Will keeping the home really benefit that person financially over time?
If you do decide to try to keep the home, you’ll have to take on the existing debt on the property. You’ll also have to find a way to pay your spouse for his or her share of the home’s equity. Often times this is going to require you taking on more debt in the form of a larger mortgage.
If you’re planning to sell the matrimonial home, or you eventually decide that’s the best thing to do, you and your spouse need to agree on some things so as to maximize the sale price. No one other than a trusted Real Estate advisor should know you’re selling due to divorce. Otherwise, it can really lead to lowball offers if buyers think you’re desperate. You might think you and your spouse can split the proceeds as soon as the sale of the home is completed. However, you’ll need to have a separation agreement already signed before the lawyers can give you each your share of the money. Usually, if you don’t have a signed separation agreement, the proceeds from the property sale will stay in a lawyer’s trust account until you and your spouse can agree on what to do with them.
Keep in mind that, if you want to buy another home for yourself, you’ll need that same signed separation agreement to qualify for any financing. Please don’t run out and make an emotional home purchase without lining up everything first. I’ve seen people sign separation agreements with terms that they would normally not accept only because they need it in order to close on a new property and not lose their deposit.
I’ve been working with separating and divorcing couples for close to 20 years so please let me know if you need any type of family law professionals. From a mediator, to a parenting coordinator, or a mortgage agent specializing in getting financing for divorced individuals, send me a message to tap into my extensive network of qualified professionals.