When going through a divorce, the #1 issue for most spouses is their minor children. In terms of inanimate objects, though, the most valuable asset with which most divorcing spouses must deal is the marital home. Obviously, one of the last things you want is to have your name on the mortgage if your spouse is the one remaining in the home after the divorce. No one wants to be attached to a debt for a home they have no legal right to occupy. There are ways to safeguard yourself financially, both before and during a divorce. One of those ways is by retaining a knowledgeable South Florida family law attorney to make sure you are fully protected.
Refinancing a marital home after a divorce can be a particularly tricky thing here in South Florida. Given the area’s tendency to undergo large fluctuation in home prices, the marital home you’re seeking to address may have a ton of equity, or it may be underwater (meaning you owe more than it’s currently worth.)
Often, when two spouses divorce, one will desire to keep the house. The other spouse, in order to protect him/herself, will insist that the spouse staying in the home refinance the outstanding mortgage loan to finance the property in the receiving spouse’s name only. However, given the complexities of the mortgage lending industry and the volatile value of South Florida real estate, refinancing may be easier said than done. So, you may wonder, what happens if your ex-spouse got the house, but your name is still on the mortgage? That was the quandary faced by one Palm Beach County spouse in his divorce case recently.
T.R. and his wife, L.K., divorced after 13 years of marriage. In the couple’s divorce judgment, the judge ordered that the wife receive the marital home, but that she refinance it in her name only within 120 days. That was something that L.K. did not do.
What the trial judge put in her order was entirely appropriate; it was what she did not include that created problems. Ordering a spouse who receives a marital home in an equitable distribution to refinance the property to remove the other spouse from the mortgage is something that, under Florida law, a trial judge definitely has the authority to do.
However, if a trial court orders a spouse to engage in that refinancing process, the law also requires the court to state explicitly what will happen if that spouse is unable to obtain a new mortgage or just doesn’t do it. The court could, for example, declare that the wife must refinance the mortgage within 180 days or else the home will be put up for sale.
Be careful when it comes to a home you bought before the marriage
When it comes to refinancing homes, there is another issue that some spouses may need to be keenly aware of. Sometimes, that marital home you two shared wasn’t something you acquired during the marriage; it was something you purchased on your own prior to the wedding. If you decide to refinance that home during the marriage, a potentially serious trap may await you.
If you simply “add” your spouse to the deed and the new mortgage loan, what you’ve done, in many circumstances, is convert that home from your separate, non-marital property to marital property that is subject to equitable distribution if you two divorce later.
The divorce process is not the time you want to try to address this for the first time. If you bought the home on your own before the wedding, are married now, and desire to refinance the mortgage, there are ways to protect yourself. A postnuptial agreement may be one viable option. This kind of agreement may help you create a documented record that you were not seeking to gift any interest in the home to your spouse, thereby protecting you in the event of a future divorce.
Dealing with a house or other distribution of assets as part of a divorce can be a tricky thing. One thing you definitely don’t want is to suffer financial harm because you lacked the legal representation that you should have had. Instead, rely on the diligent and thorough South Florida family law attorneys at Sandy T. Fox, P.A. to protect you and help you keep what is rightfully yours. Our attorneys have many years of helping Florida spouses deal with prenuptial agreements, postnuptial agreements and divorces. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation today.