Being married to someone means sharing everything, including both assets & debt. For many couples, their home represents their largest and most important asset. This is why when a marriage is terminated it can be especially tricky to sort out what to do with the marital home (the house the couple used as a primary residence).

Whose property is it?

The first thing to know when handling such a situation is whether the house is marital property or separate property; in other words, does it belong to both spouses or just one. Separate property is anything acquired before the wedding, while marital property is anything purchased by either or both spouses during their marriage. If the house falls under the definition of separate property then the person who owns it has a right to it, but if the marital property seems to be the case it can be more complicated to divide.

The goal when settling possessions during a divorce is to divide them as fairly as possible. That said, depending on the circumstance there are several options to consider.

Bottom line

You don’t necessarily have to sell your house in a divorce. It all depends on the circumstances. However, there are many cases in which selling is the best choice, and the implications like moving out and finding a new place can be stressful in what is already an unpleasant situation. For people who need to sell but aren’t ready to move out, a rent-back agreement is a perfect fit. What that means is selling your home only to rent it back from the new owner; this allows you to access all of the equity and divide it with your ex-spouse, and then continue to live in the same home by paying rent.

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