Divorce and the Family House
When marriages break down it is inevitable that couples will ultimately separate and live apart.
What should happen to the family home if a marriage comes to an end?
This is highly fact-dependent, and there are no hard and fast rules per se. However, some general points emerge.
Priority to the children and the person they live with.
First, priority will be given to the needs of children together with the parent with whom they live. The first task will be to determine the value of the family home, together with the balance of the mortgage if any and costs of sale.
If there is a significant amount of money in the property, it is possible that the property will be sold provided that doing this will allow the reasonable needs of the children to be met during their childhood.
Childhood increasingly has an extended meaning beyond 18. For example, in relation to financial support, this now extends potentially beyond the age of 18 to the end of non-advanced education. Depending on circumstances, it is possible that a family home can be occupied by one party of the marriage until children leave university, generally only to first degree level. More usually however the end of secondary education is a trigger date for the sale of a property. This assumes of course that it is not possible before that time for the housing needs to be met otherwise than keeping the family home. There may also be related arguments of ensuring continuity and stability for children, but generally it is the reality of the situation which dictates that the family home is retained for some years.
Evidence is always needed to establish mortgage capacity (or lack of), but is it possible to agree many years in advance of the sale, what will happen, when and who will get what on a sale.
Specifically, binding arrangements can be made when children are relatively young, to take effect when they are 18 years or older. It is possible to agree what share each of the parties will have by in effect guessing at their financial position at that point.
This is not an exact science and requires certain assumptions to be made for example the likely future cost of accommodation together with the possible earnings and related mortgage capacity a party will have at that point.
This can result in an unequal sharing of the resources between parties even at the point of sale. One party may argue that it is unfair for them to have anything other than an equal division because they have had to wait, while the other may say with some force that they need more as they earn less.
A balance needs to be drawn between these two points taking into account the other financial claims which the parties can bring against each other for example pension sharing orders.
This is a delicate process which must be handled properly from the outset.
If you would like to know more about this, please contact Jim Richards of this office to assist.
By Jim Richards, 23rd May 2017.