Splitting up community property and addressing debts is one of the more difficult facets of going through a divorce. The marital residence is often a place of fond memories as well as difficult times. One decision that must be made is who, if anyone, gets to keep the marital home. Some couples find that selling the house and moving on can help with the process, giving them a “clean slate”. Others hold their homes near and dear to them, and would like to stay.
If one of the parties would like to keep the marital residence, then half of the equity of the home will need to be paid to the other party.
The question then becomes, how do you calculate the equity? More specifically, is the party keeping the home entitled to deduct the costs of a hypothetical sale in the future? The answer is no.
In Kohler v. Kohler, 211 Ariz. 106 (2005), the trial Court refused to allow Husband to deduct a portion of the future costs of a sale of the residence from Wife’s equity. And the Court of Appeals affirmed (or agreed).
What that means is if one party decides during the divorce that he/she wants to keep the property, they are not entitled to deduct the costs of a future hypothetical sale.
If you find yourself or a loved one facing a divorce and in need of a lawyer for a family law matter, please call OWENS & PERKINS at 480.630.2464 to schedule your free 30 minute consultation.