Maryland is an equitable distribution state, meaning not that both parties to a divorce are supposed to get what is fair, though not necessarily equal, amounts. If a couple owns a home, the simplest thing to do is sell it and divide the proceeds along with other assets in an equitable fashion. However, some people prefer to keep their home after a divorce and buy their partner out. If a fair settlement can be reached that awards one person the home, there are still factors both Rockville residents need to consider.
It may seem logical that when spouses are divorced and living separately that they no longer should be considered tied together financially. However, any debt that a couple got into jointly while married will still be both people's responsibility after a divorce. When it comes to an asset as expensive as a house, this could have a large impact on a person's debt-to-income ratio.
What is usually the best solution is for the person keeping the home to refinance and take their ex off the mortgage. This officially makes the home solely the responsibility of one person, freeing up the other to get another home loan if he or she desires. However, when people buy new homes before a divorce becomes final, those properties will be considered marital assets unless a spouses signs a quit claim deed to release their legal interest. If a spouse refuses to give up his or her claim, waiting until after a divorce to buy a house might be the wiser course of action.
Even in an amicable divorce, it could be difficult for couples to come to an equitable divorce agreement on their own. An attorney could assist clients receive a fair share of money or assets by providing legal advice based on Maryland divorce laws and by advocating for their clients' needs in court.
Source: Credit.com, "How to Divide Your House in a Divorce", Scott Sheldon, July 09, 2014