When Kentucky couples start divorce proceedings, deciding child custody and support issues are often given top priority. However, dividing property, including any house they might own, should rank right up there as well.
The couple will need to decide if one of them will get the house or if it should be sold and the proceeds split. This situation can get more complicated if one spouse decides to keep the house and buy the other out. Taking the other spouse’s name off the title may not be difficult, but the process doesn’t end there. That person’s name needs to be taken off a mortgage if the loan was taken out jointly. Otherwise, if the custodial spouse misses a payment, it will reflect on the credit of the spouse who left the house.
Oftentimes, the best way to avoid problems is for the spouse keeping the house to refinance the old mortgage or take out a new one. The divorce agreement should stipulate that the spouse keeping the house will refinance it right after the divorce.
Buying out the other spouse’s interest is one way to solve the issue. The custodial spouse can tap into the home equity for the cash-out. They could also offer other assets in return or forego spousal support.
Property division isn’t as simple as it seems. Couples who want to make sure it’s done properly may want to consult with separate family law attorneys to resolve the issues. They might also want to work with divorce financial advisers.