Equitable Distribution of Real Estate During Divorce Mediation

The equitable distribution of real estate during divorce mediation has become one of the most emotional parts of the mediation conversation due to the recent housing crisis.  But if there’s one thing I’ve learned as a New Jersey divorce mediator with an MBA in Finance, it’s that the division of marital assets such as real estate must be a rational and businesslike conversation.  Below you will find some issues you need to watch out for to make sure the equitable distribution of your real estate during divorce mediation goes according to plan.

1. one party has decided to purchase the home from the other - Some couples we see at Equitable Mediation Services like to take care of as much paperwork prior to the actual divorce as possible.  Trouble is, if you sign over your rights to the deed to the marital home and are still on the mortgage, you’ve got no property but a whole lot of debt.  It is important to remember to not sign away your rights to the house until your name is off the mortgage.
2. the parties have agreed to let one of them live there until the house is sold (short term) - it is quite common for one party to move out while the home is placed for sale pending the couple’s divorce but what happens in the meantime?  Who pays the mortgage and utilities?  Do you split the cost of the home or make arrangements for a predetermined amount of spousal support to begin in order to maintain it until it is sold? Do you then agree that spousal support began on an earlier date and will terminate sooner or the party supplementing the home will receive a larger share of the proceeds?
3. the parties have agreed to let one of them live there until the house is sold (long term) – who will take care of the basic payments such as the mortgage, utilities, basic maintenance and capital improvements such as a new roof or driveway?  Who gets the mortgage deduction and tax deduction?  Who gets to decide when the house goes up for sale? In this case it’s best to consult with your New Jersey divorce mediator or accountant as this situation get quite complex.
4. the parties have agreed to sell the house at a loss – are you going to use a short sale or pay the debt outright between the difference in sale price and what is owed on the mortgage?  Who will bring that cash to the closing?  In the case of a investment property, who will get that tax deductible loss?  The person that benefits from it the most? Do you split it evenly?  Other?

As you can see these are extremely complex issues and not ones to be handled on your own.  Your New Jersey divorce mediator can make sure your Memorandum of Understanding has the necessary language to outline your agreements in order to avoid difficulties down the road as for most couples, the marital home is their largest assets.  If you need assistance with the equitable distribution of real estate or any other matter related to your divorce or divorce mediation please feel free to contact the offices of Equitable Mediation Services as we’d be glad to help.