When going through a divorce, one of the biggest concerns often involves what happens to jointly-owned real estate. Spouses can make informed decisions about their future once they are familiar with how the court handles property division.
Equitable distribution of property
New Jersey follows the rule of equitable distribution. This means the court will divide marital property in a fair, though not necessarily equal, way. The court considers factors like the length of the marriage, each spouse’s financial contributions, and their economic circumstances after the divorce. Jointly owned real estate is part of this process and gets handled in a few different ways, depending on the circumstances.
Selling the property
In many cases, the court may decide that selling the property and splitting the proceeds is the best option. This approach is common when neither spouse wants to keep the home. Also, it’s a good option when maintaining the property is financially unrealistic for one spouse. After the sale, the court divides the profits according to the equitable distribution formula.
One spouse buys out the other
If one spouse wants to keep the home, they may opt to buy out the other spouse’s share. This involves determining the current market value of the property and agreeing on a fair price. The spouse keeping the property can refinance the mortgage or take on a new loan to cover the buyout, allowing them to retain full ownership.
Co-ownership after divorce
In some cases, both spouses may agree to continue co-owning the property after the divorce. The involvement of children makes this a popular option. They can remain in the family home until a specific time, such as graduation. Both spouses remain responsible for mortgage payments and other property-related expenses, so it’s important to establish clear terms.
Moving forward
Dividing jointly owned real estate during a divorce requires careful consideration of both financial and emotional factors. Finding a fair solution during property division helps both parties move forward with greater stability and peace of mind.