This is the next post in my series on the division of home equity in a Melbourne, Florida divorce. My last article discussed the process of proving whether home equity is marital or separate. Discovery is a tool by which one can acquire the financial information needed to prove the characterization of the home’s equity. It is, therefore, vital that you retain an attorney who is experienced in handling discovery. In this article I will discuss a common concern – whether one may be able to keep their home after the divorce or whether they will need to sell it. Whether or not you keep your residence will depend on your particular goals as well as the facts of your given case. If you require assistance then contact my office today to speak with a lawyer.
Florida is not a “community property” state. Instead, our laws only require that the division of marital assets be “equitable.” This means that the division of of any equity in a marital residence must be fair. When deciding what is fair, the Court will not require that each side receive an equal share of all assets. Instead, the Court will only be concerned with the total dollar value of what each spouse receives. This means that, for example, if the total marital assets (including equity) are $1,000,000, and the Court rules that each side is to get half, then the Court’s sole concern will be in ensuring that each party walks away with $500,000 worth of property and assets. Under the right circumstances, this can allow one to keep their residence.
The aforementioned concept is best explained by example. Say the parties own a home with $500,000 worth of equity. Now say that they have a joint retirement account with $250,000 worth of assets. Finally, say that there is an additional $250,000 of other assets (such as checking accounts, furniture, cars, investments, etc.). All of these assets, combined, would total $1,000,000. If Spouse “A” wants to keep the residence then they may allow Spouse “B” to receive one hundred percent of the retirement accounts and other assets. This would leave each side with $500,000. Typically, Spouse B would have to agree to such an arrangement. Now suppose that Spouse A wants to retain one-half of the “other property” which would be valued at $125,000 ($250,000/2) and also wished to keep the house. Under this scenario, A could keep the house and receive one-half of the various property items, as long as they make a payment to their spouse in the amount of $125,000. This payment would, again, ensure an even distribution. If A does not have $125,000 in cash, to make such a payment, then their spouse may agree to take installments instead.
There are times when one may wish to keep their marital residence but the parties’ finances simply does not allow them to do so. Suppose, using the example from above, that A cannot afford to let B have one hundred percent of the retirement accounts and other assets. Also, suppose that A cannot afford to make any type of equalization payments. As there would be no way for A to compensate B for their share of the home’s equity, the house would likely be sold with any proceeds being divided between the spouses.
The foregoing discussion shows that whether or not one can keep their marital residence will depend on the facts of their case as well as their financial situation. As no two matters are the same, it is strongly suggested that you discuss your situation with an attorney as soon as possible. As a Melbourne divorce lawyer, I am able to assist with cases involving the division of marital property. Contact my office today to schedule an initial consultation. We also service clients in the Brevard County cities of Titusville, Cocoa, Palm Bay, Grant, Valkaria, and Rockledge, as well as in the Indian River County areas of Fellsmere, Sebastian, Vero Beach, Indian River Shores, and Orchid.