Divorce triggers a host of lifestyle changes. This is particularly true when significant assets are at stake. Fresh living arrangements are often among the adjustments. Both parties usually agree on no longer cohabitating.
The individual exiting the home might want to buy another as soon as possible. Unfortunately, real estate deals that happen while a divorce is ongoing face complications.
What are the dangers of buying a house during a divorce?
Depending on the situation, a mortgage may be necessary, especially when buying an upscale home. One spouse could have lavish spending habits that might consume much of the available assets. Such obligations impact both parties until the divorce is on record. Subsequently, securing a favorable interest rate becomes tougher.
Other fiscal entanglements compound the struggle. Examples include complex investment portfolios and luxury vehicles. Additionally, a divorce court may split the value between spouses. This can happen to those living in community property states.
Community property states include Nevada, Texas and Wisconsin. Residents in these territories and others need court approval before making a deal. Laws often change, so it is wise to check with a legal professional.
How does one avoid the dangers of buying a house during a divorce?
Getting the other partner to sign a quitclaim deed remains essential regardless. This legal document confirms that the house belongs only to one party in the divorce.
A knowledgeable divorce attorney may help mitigate the possibility of an unpleasant outcome. Further, experienced lawyers will help their clients through the stress of divorce and changing addresses. Overcoming these hurdles is even more stressful while balancing a high-pressure job in finance or medicine.
Ending a marriage is hard enough without an unnecessary financial burden. By taking a cautious approach, one can avoid losing half the value of a post-marriage home.