Long Island Divorce: Should I Fight To Keep The House?

You may have an emotional connection with your home, however, deciding whether or not to keep it, requires a financial analysis of the pros and cons of keeping the home versus selling it.

The first thing to consider when deciding to fight for the house is whether or not you can handle the financial obligation by yourself. Keep in mind that keeping a house is more than just paying the mortgage. You will also have to pay the real estate taxes, insurance, maintenance, repairs and utilities associated with the house. In addition, most likely you will have to buy-out your spouse’s share of the house. This may require you to obtain a new mortgage.

Another factor in determining whether you should stay in the house: How long do you plan on staying in the home? Do you only need to stay a few years, for example, until the children graduate from high school? Or, do you plan on staying for a longer period of time? In either scenario, you need to make sure that you have enough funds to sustain the financial obligations of living in the home.

Although, typically you will need to buy-out your spouse’s share of the house, there are situations, where you can trade-off the value of the home for another asset. In many divorces, you can trade your share of retirement assets in exchange for the share of the value of the home. As an example, if the home is worth $500,000, and there is no mortgage, you would normally have to pay $250,000 to your spouse for his/her share of the home. However, if your spouse has a retirement asset (or other assets), that equal or exceed $500,000 in value, then you could waive your share of the retirement asset, provided your spouse waives his/her share of the house.

Yet, even when you can trade a retirement asset for exchange for a house’s value, you need to consider if this trade-off is worth it. By foregoing a retirement asset, you may not have enough money in retirement.

If you have questions regarding your home, property rights and your divorce, then contact David Badanes and the Badanes Law Office, P.C.  David Badanes has personally represented hundreds of clients in their divorce. Contact the Badanes Law Office’s at 631-239-1702, or email at david@dbnylaw.com. The Badanes Law Office has offices in Northport and Uniondale.

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What is Equitable Distribution?

divideIn New York State, you and your spouse’s assets will be distributed by “equitable distribution.” Equitable Distribution is basically a fancy word for dividing your property in a fair manner. This typically means that marital assets will be divided in a manner that is close to 50% to each party. However, the Court does not have to divide marital assets such that each party receives 50% of the marital assets or even close to 50%.

The first step in dividing assets is to determine all the assets and liabilities of both spouses. This involves a careful inventory. If you fail to identify an asset or liability, then it will be impossible for the Court to determine if it is a marital asset or a separate property asset.

Once an inventory of all property is performed, the next step is to determine if the particular asset is to be classified as either marital property or separate property. If the asset is classified as separate property, then it is your property and the Court will award you that property. The same applies to separate liabilities, if the liability is yours, then you will be liable for it.

In contrast, if the asset or liability is classified as marital property, then the Court needs to determine how it will be divided.

There is a presumption that all property is to be classified as marital property. Accordingly, if you want a property to be classified as your separate property, then you have the burden of proof to show that it is separate property.

Some typical examples of separate property are: (i) inherited property; (ii) gifts before marriage; (iii) gifts from a third-party during the marriage, that are specifically designated as a gift; and (iv) a house that was owned prior to the marriage and kept in your own name.

Once a property is classified as marital property, then the value of the asset must be determined. There are three different valuation dates: (i) at the time of the commencement of the action; (ii) at the time of the divorce; or (iii) sometime in between those two dates. Which date is chosen is complicated and depends on several factors. In general terms, your house will usually be valued at the time of the divorce while pensions and retirement accounts will usually be valued at the time of the commencement of the action.

The final step is to distribute the marital assets and liabilities in an equitable (fair) manner. Again, this does not mean that all the marital assets and liabilities will be divided exactly 50/50.

If you are thinking of getting divorce and need advice on equitable distribution, the Badanes Law Office can help you. Call Long Island divorce lawyer David Badanes and the Badanes Law Office today at 631-239-1702, or email David at david@dbnylaw.com. The Badanes Law Office has offices in Northport, Suffolk County and Garden City, Nassau County.

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