Purchasing a house is perhaps the largest investment that an Illinois couple makes during their marriage. In addition to the financial investment in the home, many discover that they have an emotional investment as well. When this happens, the home can become a source of contention between the two parties in a high asset divorce.
Once it is decided that a particular party will keep the home, the remaining details need to be worked out. These often include the equity in the home, the mortgage, financial investments and spousal support. Each of these financial concerns can come into play in determining the overall divorce settlement.
It may be necessary for the individual keeping the home to buy out the other. This can be done by cashing out equity in the home or by foregoing some of the other financial assets such as investment accounts or spousal support. Prior to making this final determination, one will want to review the financial and other implications with his or her attorney.
Although only one individual is keeping the home, both individuals are most likely on the mortgage. In order to remove a party from the mortgage, it is often necessary for the individual keeping the home to refinance. This action may also free up some of the equity in the home. In addition, the individual not remaining in the home will want to be removed from the mortgage. Otherwise, his or her credit can be affected if the other party becomes delinquent, and it may also limit that person's ability to obtain other credit.
There are numerous financial decisions that will need to be made during a high asset divorce. Who keeps the house and how to handle the mortgage is often just the beginning for the Illinois couple. Experienced legal counsel can help the individual determine which assets are in his or her best interest to keep.
Source: Forbes, "Til The House Do Us Part: The Top Five Reasons To Refinance After Divorce", Jason Crowley, Nov. 27, 2017