Dividing a home can be difficult for some couples in Washington who are getting a divorce. People may have a sentimental attachment to their home, particularly if they have raised a family there.
One option is for the couple to continue with joint ownership of the home. If this is the case, they will need to decide how they will pay for expenses associated with the home including the mortgage, utilities and other costs. In other cases, one person may want to buy out the other. This may involve a mortgage refinance to take the other person off the mortgage and sever any financial ties.
Finally, the couple might want to sell the home. They would then split the equity. They should be aware that there could be capital gains tax on any profit. Furthermore, both individuals need to be able to find a new place to rent or buy. Ultimately, deciding which option to choose should be made after looking at such factors as property values, taxes and other financial considerations.
For example, selling a home might not be the quick solution it initially appears to be. Depending on the strength of the market, it could take a while to sell, and the owners may need to decide how they will cover related expenses during this time. If one person is going to keep the home in a divorce, that person should make sure it is possible to pay the mortgage, taxes, utilities and other upkeep on a single salary. In some situations, one person might keep the home in exchange for another asset, such as a retirement account. However, if this is the case, it is important to ensure that any expenses associated with the assets are accounted for in assessing their value. For example, distributions on retirement accounts may be taxed.