Divorce: Who Gets the House?
If you are getting a divorce, how should you divide the property you own like your marital home? This article gives basic information on how property gets divided after a divorce.
Divorce laws vary from state to state, and property division will depend on several factors, including:
- Where you live
- When the property was purchased
- How long you have been married
State laws govern how divorcing couples divide property among themselves. Accordingly, states follow one of these two approaches when dividing up property:
1) Community Property State Approach
If you live in a state that follows community property rules, you and your ex will split most divorce assets in half. This likely means that you and your ex-spouse will get 50% of the value of your home if you bought it during your marriage.
States that follow community property rules are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
2) Equitable Distribution State Approach
The remaining states typically follow equitable distribution. If your state follows equitable distribution, the judge will divide the property as they deem fair. This means the court will decide, on a case-by-case basis, the kind of division that would be fair for everyone involved.
But you should note that in both community and equitable distribution states, a judge will not divide property if the property is identified as one of the spouse's separate property.
What Does Separate Property Mean?
A property will be considered separate if you got it as a gift or inherited it. It will also be separate property if you bought the property before the marriage. The judge will usually order spouses to keep their own separate property in a divorce. Similarly, if you sold a piece of separate property in order to buy your new property, the new property remains separate property.
Is it really that simple? What if you didn't buy your house, but you have lived in it for years and put time and expense into making it better? Isn't it yours, too?
There are many situations where the separate property may be commingled and be considered marital property. A house bought before marriage but sustained by mortgage payments paid during the marriage would be one example of a commingled property. In other words, it belongs to both spouses.
What Is Marital Property?
Marital property is any property that is acquired during the marriage. It may include:
- Retirement accounts
- Your cars
- Your family home
- Pensions and benefits
How About Debts Such as Your Mortgage?
Who will be responsible for outstanding debts can either be decided by the court, or it can be stipulated in a divorce agreement. But you should note that creditors are not bound by the court order. This means your credit score may be affected if you co-signed a loan even if your spouse is the one who is responsible for paying it.
How Is the House Split in a Divorce?
The judge looks at a number of factors to decide who gets what from the marital property. These include:
- Whether someone plans to stay in the house
- Who made mortgage payments on the marital home
- How each spouse is doing financially
- The physical and mental health of the spouses
- Whether there is a divorce agreement
- Who has child custody of minor children and who is paying for child support
- The job skills of each spouse and their ability to find a job
- The home value
Do I Need to Sell My House in a Divorce?
It depends. If the real estate is truly your separate property, then you will get it after the divorce. If, however, the property is jointly owned, you and your spouse (and ultimately your judge) may follow a number of approaches. These include the following:
- One spouse buys the other spouse out: If one spouse plans to stay in the home, they can buy out the other spouse's share in the property. A judge may also order a buyout.
- The spouses could co-own the house: This might happen if the spouses plan to live elsewhere and rent out the home, if they both plan to live in the home part-time, or if they simply want to keep the equity.
- The spouses sell the house: The sale proceeds are divided among them.
- One spouse gives up other assets: A court order might award additional assets to one spouse to offset the value of the family home.
- Deferred distribution: Sometimes, a judge may order the house to be sold at a later date. For example, a judge can order the custodial parent to live in the house until the child turns 18. After that, the home must be sold.
How Do I Sell the House?
The judge might order the sale of the home, or you and your spouse can agree to the sale. In such cases, the judge may assign a real estate agent to assist you will the sale. You and your spouse can also pick your own agent. The agent will generally guide you on the best way to get the maximum profit on your home.
What If the House Is in Your Ex-Spouse's Name?
This will not matter as much as long as the property is considered marital property. If the property has been acquired after marriage, it does not matter whose name is on the title of the house. The other spouse will still get some value of the home after the divorce.
Even in cases where one spouse bought the home prior to the marriage, it is common for the other spouse to receive some form of compensation for the home if both spouses have lived in the home for awhile.
What Should I Discuss With My Lawyer?
Divorce can be very complicated, both financially and emotionally. It is, thus, important to know what issues you should discuss with your lawyer when it comes to your financial questions. Some of the things you should consider asking your lawyer include:
- What can I do to keep the home?
- What will happen to my pension and retirement benefits?
- What will happen to my personal property?
- How do I get my name off the mortgage if my spouse gets to keep the house?
- How will we divide debts?
- What will happen to funds, bonds, and stocks that I purchased before and after marriage?
- Divorce Property Division FAQ
- Sample Form: Property Settlement Agreement
- Can I Legally Stay in My House During a Divorce?
Want to Know How Your Marital Property Gets Divided After a Divorce? Speak to an Attorney
Often times, divorce can be messy, and spouses will need the court's intervention to divide up property. If you are going through a divorce with a house, it would be best to speak to a divorce attorney to make sure your interests are protected.