During a divorce, tensions often run high, especially when it’s time to divide marital property and debt. Typically, the most significant asset (and debt) during a marriage is the marital home, and there’s no one-size-fits-all answer to the question of “who gets the house in a divorce?”
What Is Marital Property and How Does the Court Divide It?
Marital property is typically any asset that either spouse acquires during the marriage. How the court divides property will depends on the laws in your state. Some states, like California, divide property according to community property principals, meaning equally between each spouse.
In other states, like Michigan, the court divides marital property equitably (fairly) to each spouse. It’s important to understand that this equitable division method doesn’t always mean a 50/50 split. Regardless of where you live, the court will use a variety of factors to determine how to distribute your assets and debt, which may include (but not limited to):
- each spouse’s work history and prospects
- each spouse’s income and current financial status
- whether either spouse acquired separate property during the marriage, and
- marital misconduct.
Courts routinely award a party’s separate property to the owner. Separate property is typically anything that a spouse owned before the marriage. The court will also categorize an asset as separate if only one party received it during the marriage and kept it separate. For example, if your grandmother left you a sizeable inheritance and you put the funds in a separate bank account during the marriage, the court will probably award that money to only you.
On the other hand, it’s possible for separate property to become marital property. If you commingle (combine) your separate assets with marital property, or if your separate property increases in value during the marriage and your spouse helped improve it, the court may divide the added value between both spouses.
Should One Spouse Keep the House?
It’s common for a spouse to want to keep the house rather than sell it. Homes are rarely just a piece of property, and it’s not unusual to feel emotional ties to the house where you raised your kids and lived as a family for the first time. That said, if you would prefer to keep the home after the divorce, it’s critical that you make sure you can qualify for a mortgage on your own and can afford the monthly payments and upkeep. Talk with a financial adviser to help you decide whether you’ll be able to cover the expenses of owning a home with one income.
You can buy out your spouse’s interest in the home.
Unless the court deems your house to be separate property, you’ll need to compensate your spouse if you keep the home after the divorce. If you and your spouse agree to the arrangement, you should both get an appraisal of the house from independent appraisers, compare the results, and use the average of the two to determine the amount.
You’ll also need to complete a quitclaim deed, which is a document that allows one spouse to transfer the interest in the property to the other. Just remember, a quitclaim deed will not impact the agreement you have with the mortgage company, so if you want your name off the loan, make sure the court puts the requirement in the final judgment of divorce with a deadline for your spouse to refinance. If your spouse doesn’t meet the deadline, typically the court will allow you to sell the home.
What Are the Other Options for the Home?
Sell the home and split the profits.
Your judgment of divorce can dictate that you sell the home and split the profits. Most couples utilize this option because it’s easier than a buy-out or co-owning the home. If you sell the house, it’s critical to make sure the language in the divorce judgment accurately describes each spouse’s responsibility for the sale, a time frame for listing the property, and a provision for what should happen if the home doesn’t sell. Both spouses must agree to accept or reject an offer, and if you can’t agree, the judge will decide for you. Once you finalize the sale, you will divide the profits (or debt) according to the judgment of divorce.
Continue to co-own the home.
A less common solution is to continue co-owning the home after the divorce. Some parties like the co-ownership option to keep some sense of stability for their children, but it’s often not a viable long-term solution. Financially, co-ownership can be stressful and harmful on your credit if your spouse stops paying the mortgage. Finding a remedy through the court when a spouse violates the court order isn’t immediate, so while you're waiting for the court to act, your credit could be damaged. Your judgment of divorce should be clear on each spouse’s responsibility for the mortgage, taxes, maintenance, and home repairs. Lastly, you should make sure your divorce agreement addresses what should happen if either spouse later decides to end the co-ownership.
What Happens in the Short-Term During Divorce?
Divorce isn’t usually quick, so you’ll need to have a plan about what to do with the home while your case is proceeding. It’s common for couples to live in the house together during the divorce process, and you can ask the court for temporary orders identifying which spouse is responsible for payments to the mortgage and utility companies.
But, if you’re not comfortable sharing space during the divorce, either can move out of the home to keep the peace. Contrary to popular belief, leaving your home during a divorce will most likely not impact your share of the asset.
If your relationship isn’t one where you can live together, but neither spouse wants to move, you can ask the court for temporary orders instructing one spouse to leave. However, without a court order, neither spouse can force the other to move out of the home, change the locks, or hold property hostage during the divorce. If you have questions, you should speak to a local family law attorney.