When a divorce happens, the court will generally award each party their own separate property and divide the marital property between them.
Since Washington is a community property state, it’s presumed that everything acquired after the marriage began belongs to a couple equally – including real estate. How does a house get divided under these circumstances? There are usually a few options, including the following.
Sell and split the proceeds
The easiest thing to do is probably sell the house and split the proceeds. Actually putting the property on the market can avoid squabbles over how much the home is worth, and end your financial entanglements with your spouse much more easily. This is also sometimes the only viable solution if neither party can afford the mortgage and maintenance of the home on their own.
Refinance and buy out the other
If you and your spouse can agree on who will keep the house (and that spouse can afford to do it), that party will need to refinance the home into their own name and “buy out” the other spouse’s share of the equity. Sometimes a cash-out refinancing can allow the party who remains in the home to divide the equity, while other times they may need to “trade” other assets to the spouse who is leaving to make sure they obtain their share of the marital pot.
Keep it until later
Sometimes, it just makes the most sense to hang onto a property for a while as an investment. This might be a good solution if there are minor children involved and you want them to stay in a familiar environment, or it could be useful if you think the real estate market is soft in your area and you want to wait until prices go up again. This can be tricky because you remain financially tied to your ex-spouse for a while after the divorce is final, so that means having clear agreements about things like the mortgage, taxes and repairs.
If your marital property includes a home, figuring out what to do with it can be difficult. Not only are there financial issues that have to be addressed, but you may also have to consider the emotional impact of the issue. That means that there’s no perfect solution for every couple. Seeking legal guidance tailored to your situation can help you determine what’s best for your needs.