Spouses who jointly own real property often respond to divorce by choosing one of two paths forward. They either agree to sell the home that they acquired together or one spouse retains the home after the divorce.
Both of those arrangements allow the spouses to share equity. However, there are certain scenarios in which spouses may want to continue joint ownership of the home. When spouses find themselves in unusual circumstances, they may need to come up with unique solutions.
There are many reasons for continued joint ownership
Divorcing spouses may aspire to maintain joint ownership of their home for several different reasons. One of the more common reasons in recent years is a birdnesting custody arrangement. Perhaps the family lives in a very competitive school district, where acquiring property can be quite challenging due to high demand levels.
Maybe there is a child with special needs in the family who may struggle to adjust to changing household circumstances. The parents might decide that they want to establish a birdnesting custody arrangement. Such cases involve the children staying in the family home even after their parents divorce for optimal social and financial stability.
Other times, parents may want to retain joint ownership to protect what they have invested in the home and maximize the profits they derive from the property. If the home still requires repairs or modifications before spouses can sell it, they may agree to temporary joint ownership after the divorce. They could also agree to work jointly as landlords while leasing the property to others as a source of income that they can use, possibly to support their shared children.
Spouses need protection in unusual cases
Those planning to employ unique solutions during divorce proceedings typically need more robust protection than those liquidating or allocating property during the asset division process. Otherwise, their good intentions and cooperation now may lead to major challenges in the future.
They may need clear contracts describing what they intend to do with the property in the future and their individual obligations for maintaining the property in the meantime. The more thoroughly divorcing homeowners prepare, the less likely they are to experience disputes and disappointments later when they are ready to sell the property.
Considering the long-term implications of different property division decisions can help people during divorce proceedings. Customized solutions for high-value assets can give people more control over their finances and more options as they prepare for life after divorce.
