What Happens to the Marital Home in a Wisconsin Divorce?

 Posted on May 28, 2020 in Family Law

Everyone knows that divorce can be difficult for several reasons. For some people, the legal aspect of divorce is more difficult and stressful than the emotional impact. For others, the emotional side of divorce is the part that gives them trouble. Even things like the asset division process can be daunting, especially when dealing with things such as the marital home. For many people, their house may have significant meaning, and it may hold a special place in their hearts. Often, the marital home is the first house that the couple purchased together, and it may be where their children were raised. Deciding what to do with the marital home is only one step in the property division process, and it is not always easy. An experienced family law attorney can guide you through the proceedings and help you achieve a positive outcome. 

Understanding Community Property Laws

Most states function under the "equitable distribution" principle when it comes to dividing assets in a divorce. Only nine states do not function under that doctrine, and Wisconsin is one of them. In the state of Wisconsin, marital property is considered to be "community property." This means that the law presumes that each spouse should leave the marriage with roughly half of the marital assets. The only property acquired during a couple's marriage that may be exempt from being divided in a divorce is property that was acquired by either spouse through gifts or an inheritance.

Focusing on the Marital Home

When it comes to dividing the value of the marital home, there are, for the most part, three ways to accomplish this: 

• Selling the home and splitting the profits

• Remaining in the home and buying out your spouse

• Keeping the marital home under joint ownership

Selling the home is often the easiest route you can take when splitting the value of your home during your divorce. Before you list your home for sale, you and your spouse should agree on a selling price. Once you sell your home, take the proceeds you made from the sale and split them in half. This is the simplest way of dealing with the marital home, but it is not always the most desirable.

If you wish to keep the home, you will have to “buy out” your spouse's share of the home's equity. To do this, you may need to hire an appraiser who will be able to tell you what the home is worth. For example, if your home is appraised at a value of $200,000, and you still owe $100,000 on your mortgage, you have an equity of $100,000. If you still want to keep the home, you would have to qualify for a $150,000 mortgage -- $100,000 for the outstanding loan balance and $50,000 to buy out your spouse’s equity.

Keeping the family home as a joint asset is not usually a good idea, although it is not unheard of. Retaining assets in both of your names after your divorce can present certain risks that may affect you in the future. When you continue to co-own your home after you are divorced, both you and your ex-spouse will both be legally liable for making mortgage payments, even if you originally agreed that only one spouse would make these payments. Falling behind on payments and the potential foreclosure of the home could have significant effects on your credit, and your obligations toward a home that you co-own may affect your ability to obtain other mortgages or loans in the future.

Contact a Muskego Divorce Attorney 

The property division portion of your Wisconsin divorce is likely to be stressful and emotional, especially if you and your spouse are not on the same page when it comes to dealing with your home. At Bucher, Wolff & Sonderhouse, LLP, we will fight for your best interests when it comes to dividing your marital property. To schedule a free consultation with one of our knowledgeable Waukesha County property division lawyers, call us today at 262-232-6699.

Sources:

https://docs.legis.wisconsin.gov/statutes/statutes/767/VII/61

https://www.nerdwallet.com/blog/mortgages/how-to-split-home-value-in-divorce/