In many cases, the equity in the Marital Home is the largest asset in a divorce. Consequently, this is one of the first things clients ask about when they come to my office. Typically, a client has two questions: First, who gets to stay in the marital home. Second, how is the equity in the marital home divided.
In this post, I will address the second question: How is the equity divided?
Utah Law (Utah Code § 30-3-5) requires an equitable division of property, including the marital home. Note that an EQUITABLE division means a division that is FAIR, which may not mean EQUAL. There are many factors that go into an EQUITABLE division, including whether the home is considered marital property or non-marital property. Usually, if the home was purchased during the marriage, then it is considered marital property and is subject to an equitable division.
In some cases, the parties may agree on what is equitable. In other cases, the parties may not be able to agree on what is equitable and the Court may have to decide. Regardless, one of two things happens:
- the home is sold and the equity is divided between the parties or
- One party stays in the home and buys-out the other party.
When one party buys-out the other party, it often gives rise to another dispute – determining the value of the marital home. The value of the marital home is important because it, minus the outstanding mortgage obligation, determines the equity available for the parties to divide.
Diana Holbrook McKee’s “Comprehensive Property Analysis” has provided a huge benefit for my clients because it provides a cost-efficient way to determine an accurate value of the home. Often, lawyers will simply determine the value of the marital home based on county tax records. These records often do not represent the true amount that a buyer would be willing to pay for the house. Thus, by taking advantage of the “Comprehensive Property Analysis” a party may be able to get more money in their divorce.
Adam Kawaguchi is a family law attorney with the Hanks & Peterson, P.C. law firm in Salt Lake City Utah. For more information about property division and divorce, contact Adam at 801-363-0940 or email [email protected].