We know that going through a divorce is an incredibly difficult and stressful period, which is why, at webuyanyhouse.co.uk, we have tried to do what we can to make the process as hassle-free as possible. Dealing with the process of separating and deciding what to do with your house can leave you feeling confused and unsure of what to do next, so we’ve put together everything you'll need to make an informed decision.
Often in a divorce, one party wants to cut ties and sell, but the other wants to remain in the house, especially if it's the family home where their children grew up in. In this situation, it can be very difficult because if you're the one not wanting to sell but you can't afford to a) buy your ex-partner out or b) afford the monthly costs of running the property on your own, then selling your house is likely the only sensible option to do.
If one of you isn’t a registered owner, but has lived in the house and contributed to it, you can protect yourself with a matrimonial home rights notice.
This means whoever applies for this notice can dispute a decision on the house being sold or the mortgage being increased, and stop it happening before it gets approved.
What if there are children involved?
Children involved in a divorce tends to make things more complicated, but there are set rules in place to make things as simple as possible for the sake of the children. If you and your ex-partner's names are both on the mortgage and you’re both contributing to it, you may decide to split the mortgage differently to reflect the situation. For example, if your ex-partner has moved out of the property and you have stayed in it with the children, your partner may pay less towards the mortgage than they were previously, as they are no longer living in the house. This enables your ex-partner to afford another place to live, whilst ensuring that the children are in a stable home. This is something that you’ll be able to decide between yourselves.
When it comes to deciding who stays in the house with the children, it can be more difficult. Most of the time, it’s recommended that children stay in the family home to minimise the disruption to their lives and to make the divorce less stressful for them. There are a few exceptions to this-
If the environment is deemed unsafe
If a parent gets sole custody and cannot afford the house on their own
What do courts consider when dealing with a property in a divorce with children?
When you divorce, the judge that deals with your case will consider the following when making a decision on what happens with the house:
The income, earning capacity, property, and financial resources that each partner currently has, and what it will likely be in the future
All financial needs, obligations, and responsibilities that both partners have and is expected to have in the future
The standard of living for both partners before the breakdown of marriage
The age of each partner, and the duration of the marriage
Any physical or mental disability either partner may have
The contributions to the family and welfare of the children - this isn’t just financial; childcare is considered just the same
The attitude and conduct of each partner during the process of the divorce
The value that each partner may lose in the divorce
What can the court decree?
Generally, the courts will either decide that the property will be sold and the proceeds split, or that one partner is given full ownership of the property, or a Mecher Order is put into place.
What is a Mecher Order?
You may have heard of a Mecher Order before, as it’s often mentioned in divorces where there are young children involved. A Mecher Order is a court order that you can apply for which will affect how the property is deemed to be dealt with during the divorce proceedings.
It puts a delay on how the house will be dealt with until what’s referred to as a ‘trigger event’, which tends to be the children in the property turning 18.
This provides some stability and protection for the partner with custody for the children, but it should be remembered that it is only a temporary measure, and when you reach the date agreed the house will then need to dealt with in the way agreed upon by the courts.
If there are no children involved, who gets the house in a Divorce?
A house tends to be one of the biggest assets that we have, so you should take some time to decide what to do with it and weigh up all the pros and cons. Divorcing couples that bought a house together have a few options that they can consider when dealing with the property in the proceedings:
One partner can buy the other out and keep the house, but this can often be hard as it relies on one partner having the funds to buy the other out
If there are other large assets involved in the divorce, you may agree that one partner gets the house and the other gets something of a similar value, such as cars or secondary houses.
What do I need to know before selling and splitting our house?
This does seem like the easiest option, but before you move forward you do want to consider a few things. What is the next step once you’ve sold? For some, there is a large amount of equity in the house if you’ve paid the mortgage off completely, which will mean that when you sell you can both walk away with a good amount to fund yourself for the future. For some, however, who still have a long time left on their mortgage, things can get more difficult. You may be able to rely on your savings, but this isn’t the case for everyone.
If you sell the property and you don’t have much left over after repaying the mortgage and the associated costs with selling, you might have to rent a property for a while before you’re able to buy again.
It will depend on your personal circumstances what the best option for you is, but make sure that you have a plan in mind after you sell to avoid ending up in a difficult situation.
If you’re able to buy out your ex-partner so you can keep the property, or you’ve come to another agreement that results in you keeping the house, you can change the ownership to reflect your new situation. To transfer ownership, you’ll need to contact your lender and explain to them why you’re applying for this change. They may request more information about your circumstances and want to do another valuation of the property before approving, as they are under no obligation to change the mortgage deeds and can refuse you if they’re not happy with your application.
Your ex-partner will also need to be on board with this decision; you cannot transfer ownership without their permission.
You’ll need to speak to your lender about their specific process as it will vary across lenders, so make sure you find out what they require from you to get the change made.
After your lender and your ex-partner are happy to move forward, you will go through a transfer of equity, which is where your ex-partner’s rights and responsibilities of the house and mortgage payments will be transferred into your name. You will need to notify Land Registry of this change, and your mortgage lender will edit your mortgage agreement from joint to single.
The house is in my ex-partners’ name, do I still have any right to it?
It’s very common for only one person in a couple to have their name on the deeds to a property, and this can be a big worry for the partner who isn’t a registered owner if they’re going through a divorce. If you’re in this position and are worried about your rights, you needn’t be. You can register your involvement in the property to ensure your ex-partner doesn’t do anything without your permission, such as sell the house.
To do this, you will need to apply for a matrimonial home rights notice, which is a free application process. You will just need your partner’s name and the title number of your property.
If you don’t know the title number, or the property isn’t registered, you can do this yourself with the Land Registry by applying for a Class F Land Charge. This will ensure that your ex-partner cannot put the property up for sale without you being aware, giving you time to dispute the sale and protect yourself.
While your name may not be on the title deeds to say that you are an owner of the house, your name can still be on the mortgage. In this case, you are still partially responsible for the mortgage payments and can be held liable if your partner stops making the monthly payments. As you can still be held responsible, it’s important to ensure you’ve got your matrimonial home rights notice so if your ex-partner does try to increase the mortgage amount or take out any other kind of loan attached to the house, you can stop it. You should also contact your mortgage lender and make them aware of the split, so that if there are any issues with the mortgage payments, they are already aware of the situation.
Can they kick me out of the house?
If you’re married or in a civil partnership, or you’re on the deed of the property, you cannot be forced out of the property by your ex-partner. Even if you haven’t made financial contributions to the mortgage and the running of the house, if you’ve lived there and are married it is considered a marital asset that you’re entitled to a percentage of.
What is personal property and what is a marital asset?
When you marry, your possessions can be split into three categories:
Personal property, which are items that you may have shared in everyday life that held emotional value, such as electronics, furniture, music collections, etc
Marital property, which is anything bought and used between you in the marriage, such as the family home
Separate property, which covers anything gained before or during the marriage but was kept completely separate from the marriage in one spouse’s name; this could be a business or another property
When looking at how to divide personal property, there are a few things to consider. The law says that whoever bought the item owns the item, unless it was a gift, in which case the recipient keeps it. If the item was a shared purchase, it will be labelled as shared ownership. This can be dealt with in a couple of ways, with either one partner buying the other out of their half to own the item fully, or what’s more common, splitting various items that fall under shared ownership so that each partner has around half of the value of everything combined.
What about marital assets and non-marital assets?
We’ve clarified what counts as marital assets, but you might hear non-marital assets being talked about. A non-marital asset is another name for separate property. Non-marital assets are considered separate when they have been kept away from marital assets, but if you use finances that were marital assets to fund the non-marital asset, it can mean that your separate property is no longer considered separate and is liable to be involved in the divorce proceedings.
Even having non-marital assets in the same account as marital assets can deem it no longer separate, so you need to make sure you know the requirements and the exceptions if you’re looking to keep property separate in your marriage in the case of divorce.
How do we decide how to split things?
Wherever possible, try to settle the splitting of your items amicably as it will avoid a lot of nasty conflict and expenses should it have to go to court. If one of you is going to be staying in the property and the other moving out, try to take this into consideration when splitting items to keep things as fair as possible. Sometimes, though, it isn’t as easy as trying to be amicable, and divorce proceedings can get incredibly heated and messy. If this is the case for you, it can sometimes be a good idea to get your shared items valued so you can rest assured that things are being divided as fairly as they can.
Am I liable for their debt?
If you’ve got a joint mortgage or a loan attached to the house, you are both responsible for any debt that builds up in your name. To avoid being caught up in any of your ex-partner’s debt, you should:
contact your bank to let them know that you’ve split
put restrictions on any joint accounts to prevent further debt
Wherever possible, you should try to settle things with your ex on how to deal with the debt accumulated. Even if the debt is purely from them, if your name is on any of the paperwork you will still be responsible, and you don’t want to suffer because of this. If you can find a way to both contribute and keep on top of the debt, that’s for the best, as your credit score could be hugely affected if you don’t. This could put you in jeopardy down the line and prevent you from being approved on another mortgage in the future.
Are there taxes involved in selling a house after divorce?
When dealing with your affairs in a divorce, you want to try and make the most of what you have and not lose anything to tax. There are ways to do this, as long as you work within the correct timeframes. If you’re looking to sell the marital home and any other marital assets during your divorce, you may be affected by Capital Gains Tax.
Where possible, transfer assets between you and your ex-partner in the same tax year that you were together, as the assets can be transferred as no gain, no loss.
Mostly, income tax won’t be affected when you divorce, but you may need to think about stamp duty when you sell the property. If you and your partner reach an agreement to split the property, you’ll be liable to pay stamp duty. There is also a second home surcharge that might apply to you, which means that if you or your ex-partner is trying to buy another property while still having a share in the marital home, you will be liable for an extra 3% stamp duty tax.
What’s the difference between separation and divorce when selling?
One of the biggest differences between separation and divorce when it comes to you selling the property is that in the case of separation, you are still considered married which means you both have equal rights. After a divorce, it will be decided who gets the house, or if it’s sold and the proceeds split, whereas if you simply separate that decision isn’t finalised in a court even if you’ve made a decision that you’re happy with. Your ex-partner could change their mind and cause you more problems if the decision isn’t official. In this case, a separation agreement can be helpful. This will outline who pays off any debts involved in the relationship and what happens with any financial assets. It also outlines who has the rights to the house in the separation.
In a divorce, you legally detach yourself from your ex-partner, and therefore you can take this to anyone that they’re in debt to, to be able to clear yourself from the responsibility moving forwards. If you’re separated but not actually divorced, you will still be connected to your ex-partner and their finances. This means that any debt they get into going forward you’re still liable for, which can cause you huge problems.
Making sure that you trust your ex-partner’s financial decisions is a big part of separation, as you want to make sure that you keep yourself safe from the debt and the repercussions of it.
What happens if I inherit during the divorce process?
If you inherit property or money during your divorce process, you want to ensure that you don’t mix the inheritance with any of your shared marital assets. If the inheritance is a liquid asset, it needs to be registered under just your name in a single account that has nothing to do with your ex-partner. You want to do everything you can to keep the inheritance as a separate asset, so it isn’t involved in the divorce proceedings.
If you’re expecting an inheritance while going through the divorce proceedings, you may want to consider a consent order. This is a legally binding document that will outline how certain things get divided in a divorce, such as:
This will also save you any problems if you receive an inheritance after the divorce and if your ex-partner tries to make a financial claim for it. A consent order is a good way to protect yourself if you and your ex-partner are aware that you’ll be receiving an inheritance but that hasn’t been finalised when you’re going through the divorce proceedings.
What about property I have in trust?
If you have property in trust, it will depend on whether it counts as a marital asset or a non-marital asset. If your property in trust has been kept separate, it won’t be counted in the divorce proceedings, but if any marital assets have been in contact with the trust, it may not be considered separate, even if your ex-partners’ name isn’t on the deeds. If you have property in trust that you’re the settlor of rather than the beneficiary, it will depend on the type of trust you’ve got. There are two types:
An irrevocable trust, which is irreversible. If you have this kind of trust, the property in this trust will go to the beneficiary that you’ve decided when you die, and this doesn’t change, even if the assets in trust are considered marital assets when you divorce
A revocable trust, which can be undone. This can be undone by yourself or by a court order during divorce proceedings, and so if the property in this trust are deemed marital assets they will be taken out of the trust and split accordingly.
Can I hide assets in the divorce process?
Many divorcing couples forget that their attitude and conduct is assessed in the divorce proceedings, but this can be a big factor in the courts.
If a judge finds out that one partner has tried to hide any assets, or has been dishonest in the proceedings, they will take this into account and likely reward the other partner with more of a percentage of the assets.
Because of this, it’s crucial that you’re completely honest and open in court when discussing any assets that you have, so you don’t put yourself at risk of losing any assets.
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