If you are in the midst of a divorce, you know how complex property division can be. California is a community property state, which means the court presumes that both spouses jointly own all marital property. On paper, this sounds like a simple process, but that is not always the case.
Of all the property couples own, the family home often causes the most conflict. Spouses can argue indefinitely about what to do with the home, but when emotions rule these discussions, a fair and realistic resolution may be elusive. After creating a family inside the home, it can be difficult to let go, but in many cases, keeping the house is not the wisest goal in terms of property division. Here is why.
In addition to monthly mortgage payments, there are many costs associated with maintaining a home. These costs include utility payments, home repair and maintenance expenses and insurance premiums. Even when one spouse can afford these expenses, keeping the home can make it difficult or impossible to manage other expenses associated with day-to-day life.
There may also be tax consequences for the spouse who gets the family home during property division. Married couples can exclude a large portion of capital gain when selling a home, which is beneficial when paying taxes on the home. For a single person who decides to sell the home after a divorce, these exclusions are significantly smaller. This can mean owing thousands of dollars in capital gain taxes.
A great way to make informed decisions during the property division stage of divorce is seeking guidance from an attorney. The right representation can make a large difference in the strength of your financial situation in the aftermath of your divorce.