The drop in housing prices hit the news as it is the biggest fall in 14 years. In this blog post director and specialist divorce lawyer Lucy Theobald looks at whether this has the potential to influence divorce proceedings.
Separating can be difficult enough emotionally before considering the arrangements that need to be made regarding the family home. The family home is often the most important asset in divorce matters, and it doesn’t matter whose name is on the paperwork – it forms part of the matrimonial pot available for division. Often it is also the most substantial asset. Any decline in property values can have both financial and emotional repercussions for divorcing couples, further complicating an already sensitive and complex process.
Divorce property division and asset allocation
One of the primary concerns in divorce proceedings is the equitable division of assets, with the family home typically holding significant value. The court’s overriding objective when dealing with a divorcing couple’s financial assets, is that of fairness. The court will want to ensure that whatever settlement reached is fair to both parties. A drop in housing prices could result in a diminished overall asset pool. Where there are already heightened tensions and disputes between the couple involved it may mean that mean revised valuations making agreeing on the fair allocation of the property a little harder.
Child contact and relocation decisions
The drop in housing prices can also impact decisions related to child residence and relocation. In the event that one spouse wishes to keep the family home to provide stability for the children, the declining value may make it unaffordable or impractical. Finding the right option for you may mean having to make difficult choices, such as selling the home, nesting (where the children stay in the home and the parents move in and out) or perhaps a deferred sale where the family home is kept and used by one spouse until the child reaches 18.
Emotional Toll
Navigating the emotional terrain of ending a marriage, coupled with the financial implications of property devaluation also should be given thoughtful consideration. For many, the family home carries sentimental value, representing years of memories. News of property market value good or bad can sometimes add gravitas to these feelings. Try to focus on the facts. A good divorce lawyer will be able to explain your options, recommend other experienced professionals such as mortgage brokers or financial advisors and help support you through the process.
The drop in housing prices can introduce an unwanted element of uncertainty to divorce proceedings that needs careful consideration and professional guidance. Conscientious couples can navigate the challenges, protect their rights during this transformative time and come out of the divorce process with confidence for what the future holds.
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