You're getting divorced, and you have questions about your marital home. Who will live in the house? Who will pay the mortgage? Where will the kids live?
Further, should the spouse who remains in the marital home get reimbursed for expenditures related to the home? Should they have to pay the spouse who leaves and must find a new home?
Let's explore some information that will help answer these common questions divorcing couples ask about their marital home.
Common questions about the marital home during divorce
Most clients contemplating a divorce want advice about the family home from the get-go. Some common questions are:
- Who will keep the house?
- Should one spouse buy the other out?
- Am I more likely to get the kids if I keep the house?
- Will we have to sell the house?
- If we sold the house, how would the proceeds be divided?
- What if the home was owned by my spouse prior to marriage and I was later placed on the title?
- If I'm not on the title, do I have an equity interest?
- If we can't agree on division, will the court make us sell?
- Can we keep the house until the kids turn 18 and then sell it?
What if I used my inheritance to pay down the mortgage or make improvements to the home?
Who gets the house in divorce? How do you split the value? Try our Home Equity Buyout Calculator.
Who has an interest in the house during a divorce?
The above questions are easier to answer when you know whether you live in an equitable distribution state or a community property ("marital property”) state.
If you live in an equitable distribution state
In an equitable distribution state, marital property is divided in an equitable manner. This means that if your name is on the property title, you are considered its owner. However, even if your name is not on the title, you have a legal right to claim an equitable portion of that property when divorcing.
If you live in a community property state
In a community property state, property acquired by either spouse during the marriage and before separation is a joint asset (with some exceptions). In the simplest scenario, your home was purchased during the marriage with joint savings or the earnings of one spouse. Upon divorce, each spouse is entitled to 50% of the equity in the home. (That said, someone might owe reimbursements for expenses associated with the house after separation but before the divorce or settlement.)
Issues and exceptions
Most family law cases aren't as simple as the example above. For example, if you used funds you had prior to your marriage (or separate property funds acquired during the marriage) to make a down payment on the marital home, you may be entitled to reimbursement for that amount. Another issue that often comes up is what to do when one spouse owned the property prior to the marriage and never placed their spouse's name on the title. In this case, you might need to work with a divorce mediator or hire a divorce attorney to help you figure things out.
Similarly, if you owned the house before marriage (and later added your spouse to the title), you might work with a mediator or consider hiring a lawyer to determine what separate property interest (if any) you have in the home.
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What Should You Do With Your Marital Home in Divorce? Explore Your Options.
What if you helped with mortgage payments but were never put on the title?
Even if you aren't on the title, you likely earned an (equity) interest in the property, assuming the value increased and either one of you used your earnings or joint funds to pay down the mortgage (since income earned during marriage is considered at least in part both of the spouse's). That said, it's best to have a written agreement specifying how you will divide this asset.
What if you spent money improving the home but aren't the owner?
The non-owning spouse may have a reimbursement claim for money spent on capital improvements or other household bills. This doesn't mean they established an equity interest for any appreciation in the property. However, at least a claim for money spent may be returned.
What if you purchased the home during your marriage but your name isn't on the title?
Many clients tell us that they weren't placed on the title because their credit was terrible and, as a married couple, they qualified for a better loan by placing only their spouse's name on the mortgage. Or, they say one party exerted financial control over the other and refused to place their partner on the title.
The fact that you aren't on the title does not mean you don't have a financial interest in the home. If the property was purchased during the marriage or domestic partnership, it's presumed to be joint property regardless of how the title is held. It's up to the spouse who claims it is separate property to trace the property to a separate source.
The burden could also be overcome with a written agreement assigning the property to one spouse only. But be careful: There's also a presumption that the disadvantaged spouse was subjected to "undue influence" when they signed the inter-partner transaction.
