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Home equity a hot topic in high asset divorce

In countless divorces throughout the Houston area, both spouses decide that the best way to move on is to sell the home in which they once lived together. This can be beneficial for many reasons: a new residence can help each spouse move on emotionally, while the funds from the sale can be split more easily than other types of property and assets.

However, sometimes one spouse will try to "buy out" the other when it comes to divorce and the former family home. This can happen in any type of divorce, but especially in a high asset divorce, when couples may own several homes or the primary residence is worth a significant amount of money. Those whose spouses have offered to buy the home and pay the other spouse may consider enlisting the aid of a licensed appraiser. Determining the value of the home is essential, since either spouse can have an incentive to find the value higher or lower than what it actually is.

It's crucial that an appraiser be licensed by the state, since the appraisal needs to be able to stand in court, if necessary. Spouses may also benefit from a licensed real estate agent's opinion on the value of the home as well. In some cases of high asset divorce, one of the spouses may actually be a realtor or hold a real estate license. In these instances, it's even more important to get a third party's opinion due to potential conflicts of interest.

When one spouse buys the home from the other, it's important for the buying spouse to understand the mortgage requirements. Sometimes, that spouse may not be able to qualify for the mortgage alone, especially given today's tightened loan requirements. The selling spouse should also understand the implications of being removed from the mortgage.

Source: The Wausau Daily Herald, "Tips to protect your home equity in divorce," Richard Montgomery, Sept. 13, 2013

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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