I recently made a social media connection with a gentleman by the name of Bill Gassett, a real estate agent in Massachusetts who has done some wonderful blog work on issues pertaining to divorce and real estate. One article he wrote struck me as something that could be particularly helpful to my clients and potential clients, on the issue of selling your house during divorce. If you have any questions on the topic, please read the linked article, as I believe the issues presented are as relevant in South Carolina as they are in Massachusetts.
As a Charleston divorce lawyer, I am frequently called upon to assist my clients in making rational and and realistic decisions regarding the sale of the marital home, which, even after the recent housing bubble, usually remains the single largest marital asset for most families. The linked article is a great starting point for understanding issues related to disposing of the home, but there are some additional legal issues that seem important to expound upon:
1. South Carolina is an equitable division state, meaning that a Court must identify, value, and fairly divide any and all marital property that existed on the date of filing the divorce.
The default division is going to be 50/50, on the net proceeds of any sale (meaning after taxes, agent fees, closing costs, etc.), unless one spouse has committed some really gross marital misconduct or there is some extraordinary need on the part of one spouse. Even under these circumstances, it is unlikely the division will be greater than 55/45, at most 60/40. Depending on the value of the home, however, this unequal division could add up to a substantial sum of money. If you wish to seek an unequal division of this marital asset, you will most certainly need to seek the assistance of a Charleston divorce lawyer, sooner rather than later.
2. Whether your home actually is marital property is a question of law for a judge to decide.
This issue frequently comes up when one spouse or the other purchased the home prior to the marriage. If this is the case, the burden rests on the party seeking to prove the home has been “transmuted” into marital property to provide the court with clear evidence of such transmutation. Transmutation is simply a fancy legal term for the process of turning non-marital property into marital property. How do you prove transmutation has taken place? There are a number of factors, too many to go into great detail in this article, but most common would be taking out a second mortgage on the home in both parties’ names or re-titling the property in both parties’ names. Certainly, this is a grossly non-exhaustive list, so if you have questions about transmutation, you should consult a Charleston divorce lawyer immediately.
Otherwise, assuming the lack of a pre-nuptial agreement, if the home was purchased during the marriage, it is presumed to be marital property subject to equitable division, regardless of how the home is titled or mortgaged, unless one party can prove otherwise. The most common scenario under which a home purchased during the marriage might still be non-marital property is if the home was purchased solely with funds inherited by one spouse.
3. It is seldom in either party’s best interests to leave both names on the mortgage post-divorce.
As a Charleston divorce lawyer, I have seen this scenario blow up in my clients’ faces too many times to allow future clients to even consider such an arrangement. If one spouse is keeping the home, that spouse must re-finance so as to remove the other spouse’s name from the mortgage, period. If this is not possible, the house must be sold.
During the period after the housing bubble burst and there was simply no money available to lend for re-financing, it became a common practice to leave mortgages status quo in an effort to settle case. The Family Courts have since been flooded with contempt actions for failure to timely maintain mortgage payments, even for allowing homes to go into foreclosure. If your name is still on the mortgage, your credit gets ruined too. It’s not worth it. Insist upon re-financing or the house must be sold.
4. The Charleston-area housing market is booming again.
For a couple of years after the housing boom turned into a bust, as a Charleston divorce lawyer I saw a substantial decline in clientele as people may have wanted to divorce, but simply could not because their homes were underwater, on the verge of foreclosure, or they simply could not afford to take up two residences. The clients we had who decided to move forward with divorce anyway were often stuck with difficult decisions about how to come up with enough money to get out of their homes, instead of how much money could be gleaned from a sale. Dark days indeed.
Those days now appear to be over. I have clients who are selling their house in a week now, for full asking price. If you are considering divorce, and fear selling your house may be an obstacle, fear not. A good real estate agent can move your home in no time at all, and we know several that we would be happy to recommend to you as part of our service to you.
Please consider the linked article and the information above before making any decisions about how to dispose of your marital home, and certainly consult with a Charleston divorce lawyer.