Two parties who are dissolving their marriage are faced with the unpleasant task of dividing their possessions. Usually, the most emotionally and financially challenging possession to divide is the marital home. It certainly cannot literally be divided, so a decision must be made as to its physical disposition, with the monetary value then divided.
Because New Mexico is a “community property” state, any asset obtained during a marriage is deemed community property. Anything owned before the marriage or obtained during the marriage by gift, bequest, devise, or descent is the separate property of the party owning the asset. Also, any property or asset obtained during the marriage that the parties agree is separate property is considered such by the court.
There are several ways that the marital home is typically addressed. The most efficient way is that one party buys out the other, compensating him with an offset of other marital assets or by direct payment. This avoids the hassle of selling the house and prevents delay in the parties’ disentanglement.
When minor children are involved, there is often an incentive for one parent to stay in the home for their benefit. This can be achieved by the buyout option noted above. However, sometimes the final disposition of the house will be delayed until the youngest child reaches emancipation. In the meantime, the court will specify an equitable way of offsetting assets and obligations that is fair to the parties.
The other method of dividing the marital home asset is to sell it and divide the proceeds. Assuming all other marital assets have been allocated according to agreement of the parties or by order of the court, the distribution of house sale proceeds is straightforward. The only downside is that this option keeps the parties entangled inasmuch as they must communicate and cooperate until the sale.
If the marital home carries a debt that exceeds its market value, each party owns an equal share of the debt. The same options for disposition are available, but it can become more complicated, especially if the decision or order is to sell the house. Then, each party would have to satisfy his or her share of the remaining debt with the mortgagor. If one party wants to remain in the home, there are many different ways the parties can structure the dissolution to deal with the debt issue.
An experienced New Mexico family lawyer can help you understand the issues that must be navigated in a dissolution, particularly the disposition of the marital home. If you have questions about the distribution of marital assets or dissolution in general, contact the Lightning Legal Group. We understand the typically acrimonious nature of proceedings, and we’ll help you find your way. Contact us today at (505) 247-2390 for experienced legal advice.