If you are getting divorced or dissolving your civil partnership, one of the biggest financial decisions you could face is what happens to the family home.
The home has a special place in any family, and in many cases it is the major family asset. So it's little wonder that when a family breaks down, property will be central to a divorce settlement.
What happens to an existing home and where one or both partners decide to go next will depend on the couple in question.
What are the main options?
- Sell the home and both of you move out. You could use the money you’ve raised to put towards buying another home for each of you, if you can afford to do so.
- Arrange for one of you to buy the other out.
- Keep the home and not change who owns it. One partner could continue to live in it, perhaps until your children are 18 or leave school.
- Transfer part of the value of the property from one partner to the other as part of the financial settlement. The partner who gave up a share of their ownership rights would keep a stake or ‘interest’ in the home. This means that, when it is sold, they will receive a percentage of its value. In this scenario, it is important that the person moving out knows they are still liable for the debt on the family home. This means that they may struggle to get a mortgage on another property.
Dividing and valuing your home
If you want to buy your partner’s share or sell your home and divide the proceeds of the sale, you will need to get the property valued.
A valuation report is recommended, as this is an independent, professionally prepared assessment of a property’s value at an agreed point in time. The report, unlike an estate agent’s estimate, is based on standards set out by RICS.
Prioritising the needs of your children
It is most important of all to consider the impact your behaviour can have on your children, should you have any. You might have split up, but you still need to ensure you are acting in their best interests at all times.
Although most couples who divorce or dissolve their civil partnership don’t go to through full court proceedings to settle financial disputes, it’s a good idea to have an understanding of what the courts would decide in respect of the family home were they to do so.
If you have children, especially if they are young, the court will take into account the fact that they need somewhere suitable to live [with either parent]. As parents, it’s important to keep the needs of your children uppermost in your minds at all times during a divorce or dissolution.