When it comes to deciding how to handle the family home during a divorce, there are always a lot of emotions involved. These feelings can be provoked even more if the spouses cannot agree on how to manage the property, or if there are young children involved. However, because a home is often the most valuable asset that a couple owns, it is advisable to consider all of your options and seek legal help as needed in order to ensure that you are making the smartest financial decision in terms of your property’s emotional and monetary value.
In many cases, the simplest and cleanest way to divide property assets is to simply sell the home so you can move on with a fresh start. If this is the route that you and your spouse have agreed upon, you may be asking yourself when the best timing for the sale is.
Whether it’s in your best interest to sell the house before or after divorce, depends on your specific situation in terms of how you wish to divide the property’s value, how soon you want to move out, and the housing market conditions of your home’s neighborhood.
Colorado Laws on the Division of Marital Property
In terms of marital property division, Colorado is considered an “equitable distributions” state, meaning that if the decision on how to divide marital property assets is left to the court, then they will base their verdict on what they consider to be a fair distribution. This differs from some other states in which property value is simply split evenly.
As outlined by the Colorado Revised Statutes Article 10, Section 14-10-113, some of the factors that Colorado courts will consider if left to divide marital property include:
- Each spouse’s monetary contributions to the property’s acquisition.
- The value of the property each spouse was given in the property award.
- The economic circumstances of each spouse at the time that the property division will take effect, including which spouse will have custody of the children, and whether it would be just to allow one of the spouses to remain in the home for a period after the divorce.
- The value of any separate properties owned by either spouse.
Whenever possible, it is always better for those going through a divorce to come to an equitable distribution on their own or with the help of lawyers, rather than leaving the decision to a judge. This will improve your chances of arriving at a better deal that both parties can agree on.
Selling Your House Before Divorce
For some, selling a home before signing a divorce agreement may be the easiest way to ensure there are no loose ends after the divorce so that you can each move on and start new lives. This option would allow you both to place your home on the market, divide the profits from the sale as you see fit, and then move into separate properties without the complications of still owning a joint mortgage.
While this may be the easiest option for some, there are certain complications to consider. For example, if you are hoping to complete the divorce process quickly, trying to sell your home before the divorce may take too long depending on the market conditions of your neighborhood. On the other hand, if one of the spouses is hoping to stay in the home if possible (say to keep children in the same school), it would probably be in your best interest to wait to sell your home after the divorce agreement.
Selling Your House After Divorce
Selling a house after the divorce agreement allows you to work with lawyers to create a legal agreement on how to fairly distribute the equity of your home. With this system, each spouse will typically be allotted property shares, based on the determined equitable distribution, and once the house is sold each party will receive their portion of the profits. In some cases, one spouse may be able to “buy out” the other spouse’s shares to keep the property after the divorce.
In addition, if one spouse is hoping to stay in the home for a period of time, a judge may be able to grant a deferred distribution, meaning that the sale of the home is temporarily pushed back until a determined date—for example until your kids graduate from school or turn 18. After this deferral period, the home must be sold. Because divorce can be an especially emotional time for children, this ruling is often given to preserve a sense of stability for the child.
Of course, there are other factors to consider for each option, such as how you can save money on capital gains tax, how to remove one name off the mortgage if the other spouse wishes to keep the home, and whether you and your spouse will be able to agree on a proper selling price.
To make your property division as easy and civil as possible, call our legal experts at (303) 331-6432 for a consultation and to receive guidance on any questions that you may have.
The information in this post is not legal advice—it is only legal information. To obtain legal advice by hiring the attorneys of Broxterman Alicks McFarlane PC as your counsel, please contact the firm at email@example.com or 303-331-6432.