If you are considering divorce, one of your biggest questions may be who will get the house in the divorce. There are several things that the court usually takes into consideration when determining who will receive ownership of real property. However, if the couple can come to an agreement between themselves about the house, in the vast majority of cases the judge will allow the agreement to stand. It is important to note that sometimes factors not addressed here will be determinative. As every situation is different, it is best to consult a knowledgeable divorce attorney to help you understand how the laws will apply in your specific situation.
The first step in determining who will own a piece of real property after a divorce is to determine how much it is worth. This can be done in one of several ways. Some couples will use the home’s assessed value. However, these values can often be significantly lower than the actual current value of the house. If the parties need a precise value they can hire a real estate expert to help get an up-to-date valuation.
Once the parties know the value of the house, then they can figure out the amount of equity they have in the house. Equity is the value of the house, minus the amount that is still owed on the mortgage. In other words, it is what the parties would take away if they sold the house today.
If there are children from the marriage, then generally the court will award the house to the party with physical custody of the children. Divorce is usually hard on children, and therefore judges tend to look favorably upon keeping the status quo as much as possible. That’s why if it is an option, and all other things being equal, the court will give the house to the spouse that the children will live with.
One of the major steps in asset division during a divorce is to identify which property is marital and which property is separate. Separate property is property that was acquired by one spouse before the marriage or was gifted or inherited during the marriage. If one party owned the house before the marriage, then they will probably be awarded the house, especially if it was already paid off. However, if marital funds were used to pay the mortgage then the spouse who does not get the house will likely receive other property to offset their half of the equity acquired during the marriage.
This can get very complicated however, because of the principle of comingling. Comingling is when separate property is mixed with marital property and thus is turned into marital property. For example, imagine a man buys a house with a minimal down payment and then gets married two years later. If the couple stays together for 30 years before they divorce, living in the house the whole time and paying the mortgage with marital funds, the judge is likely to see the house as marital property. The court will look at all of the circumstances to make a decision.
There are two different principles that states can adopt to govern how property is divided during a divorce. Most states use an equitable distribution scheme, but there are some that use a community property approach. Community property states treat all the assets acquired during the marriage as belonging 50/50 to the couple, no matter who earned the money. (However, separate property that is maintained as separate property remains separate no matter which property scheme is used.) With equitable distribution, the marital property is divided “equitably.” This does not necessarily mean equally, though it often will. Thus, the equity in the house will be divided in one of those two ways.
Since the equity in the house will generally be divided, in order to keep the house typically one spouse will have to “buy out” the other spouse with other assets. However, some spouses may not be able to afford this, and they will need to sell the house. There also may be other reasons for selling the house, including financial and emotional reasons. In all situations, the totality of the circumstances will be taken into account.
