When Illinois couples seek a divorce, figuring out what to do with real estate may be difficult. Real estate is typically jointly owned. However, if the couple no longer wishes to manage the property together, one party might offer to buy out the other party's interest in the asset.
Debt obligations or a mortgage may be a reason to divest in a certain property. Because of an existing mortgage, the party that no longer lives in the family home may find it difficult to negotiate another loan on a new residence. The only ways to change this situation are through selling the house or refinancing the mortgage in a way that removes one party from liability. Using gift funds to buy out a former spouse is also a possible option.
For example, consider a case where both spouses put a certain amount of money toward the house. The spouse leaving the property may want to have that money reimbursed. The spouse staying in the property may refinance the mortgage, cash out that amount of money, and pay the party who is leaving the property. If the value of the property has gone up or down drastically between the joint purchase and the divorce, gift funds may be used to offset the difference.
During a high-asset divorce, a family law lawyer may be helpful. Protecting one's finances is critical when considering one's future, and a lawyer may be able to advocate for a client's rights and interests throughout the proceedings. The lawyer might also demonstrate the other party's obligations during negotiations and hearings.
Source: Credit.com, "Scott Sheldon", December 04, 2014