Illinois divorce laws require a fair or equitable division of your marital assets, including your home. Your primary residence may also represent the highest value item in your marital property.
As noted by SmartAsset, investments and other property acquired during a marriage belong to both spouses. If your house makes up a large portion of your wealth, several options may give you and your spouse a way to receive a fair share of its equity.
Both spouses selling the home
Some couples decide to sell their home and split the proceeds. Depending on your property’s market value, you may keep your fair portion of any remaining cash after a sale.
If you have a mortgage or any liens attached to your property, a sale may help you settle the debts. However, you and your spouse may both have liability for capital gains taxes when the house sells before finalizing the divorce.
One spouse keeping the home
Homeownership following a divorce may require one spouse to refinance a mortgage or apply for a new one in his or her name. A lender may require proof of income before approving a mortgage.
If you need financial support to afford mortgage payments, you may be able to negotiate that in your divorce settlement. Child or spousal support obligations may go toward a mortgage payment, property taxes and home insurance.
If you can afford your home on your own, you may also have an option to “trade” other marital assets for its ownership. Taking an inventory of your property may give you a list of assets to assist you in negotiating for a favorable divorce settlement.