Divorce can bring many changes to your life. Along with dealing with the emotional side of separation, you may also need to make important decisions about your home, finances and other assets.
For many couples, the family home is one of their biggest assets. Deciding whether to sell it, transfer ownership or keep it can therefore be an important part of a property settlement.
If you are thinking about selling your home during a divorce, understanding a few key points can help you make informed decisions.
Do You Have to Wait Until You Are Divorced?
No. You do not have to wait until your divorce is final before dealing with property matters.
Divorce and property settlement are separate legal processes. Separated couples can start making arrangements to divide their property, assets and debts before their divorce is completed.
This can be useful if both people agree that selling the family home is the right option. However, it is important to understand how the sale fits into the wider property settlement before making major decisions.
Understand Where the Home Fits Into Your Property Settlement
A property settlement is not limited to the family home. It can involve different assets, financial resources and liabilities owned by either or both parties.
These may include:
- Real estate
- Bank accounts and cash
- Motor vehicles
- Superannuation
- Business interests
- Investments
- Loans and other debts
The way property is divided is not automatically based on whose name appears on the title. It is also not always a simple 50/50 split.
Various factors can be considered, including financial and non-financial contributions during the relationship and the future needs of each person.
Speaking with a Separation Lawyer Melbourne can help you understand how the home may form part of the overall property settlement.
Should You Sell the Home?
There is no single answer that suits every separating couple.
For some people, selling the home may provide a practical way to divide an important asset and move forward separately. In other cases, one person may want to remain in the property or ownership may need to be transferred as part of the settlement.
Before deciding, consider questions such as:
- Do both parties agree to sell?
- Is there a mortgage on the property?
- What other assets and debts need to be considered?
- Will one person remain in the property for a period of time?
- How will the sale proceeds be dealt with?
- Are there children whose living arrangements need to be considered?
Looking at the full financial picture can help you avoid making a rushed decision based only on the value of the home.
Agree on the Practical Details of the Sale
Even when both people agree to sell, there are several practical decisions to make.
You may need to agree on the real estate agent, sale price, method of sale and how costs will be handled. There may also be decisions about repairs, cleaning and preparing the property for buyers.
Clear communication can make this process easier. Where direct discussions are difficult, legal advice may help the parties work through areas of disagreement.
What Happens to the Money From the Sale?
Selling the home does not necessarily mean the remaining money is immediately divided equally between the two people.
Property settlements consider the wider financial circumstances of both parties. This may include what each person contributed to the relationship, parenting and homemaking contributions, assets and liabilities, and future needs.
For this reason, it is important not to assume how the proceeds will be divided before the property settlement has been properly considered and formalised.
Think About Children and Their Needs
Selling a family home can also affect children, particularly if they have lived there for many years.
A move may mean changes to school, travel, routines or living arrangements. While property and parenting matters are separate issues, they can sometimes affect each other in practical ways.
If financial arrangements for children are also being reviewed following separation, Child Support Lawyers Melbourne can provide advice about child support assessments, agreements and related disputes.
Keeping discussions focused on practical needs can make a difficult period more manageable for everyone involved.
Formalise Your Property Agreement
An informal agreement between former partners may feel easier, especially when the separation is friendly. However, informal property arrangements are generally not legally binding.
If both parties reach an agreement about how their property should be divided, it may be formalised through consent orders or a financial agreement, depending on the circumstances.
Properly formalising the arrangement can provide greater certainty and reduce the risk of future disputes.
There are also time limits to keep in mind. For married couples, an application for property proceedings generally needs to be made within 12 months after a divorce becomes final. For de facto couples, the usual time limit is two years after separation.
Keep Important Documents Together
Having the right information available can make discussions about property easier.
Useful documents may include:
- Mortgage statements
- Property title information
- Recent property valuations
- Bank statements
- Details of loans and debts
- Information about other assets
- Documents relating to the proposed sale
Full financial disclosure is an important part of reaching and formalising a property settlement.
Conclusion
Selling your home during a divorce can involve much more than putting the property on the market. You may need to consider the wider property settlement, mortgage, sale proceeds, children’s arrangements and your future financial needs.
Getting legal advice before making important decisions can help you understand your options and properly formalise any agreement reached with your former partner. If you need guidance with separation, property settlement or related family law matters, Melbourne Lawyers & Mediators can help you understand the process and the next steps for your circumstances.
