One of the most frequently asked questions during the discussion of property division is “who gets to keep the house?” A home is one of the most expensive assets that couples purchase together and when they separate, it is one they both want to keep. So how do courts decide who receives the house? Let’s discuss the process.
Deciding Whether Or Not You Should Keep The House After Your Divorce
The first thing you should ask yourself is whether or not you should keep the house after your divorce is finalized. Sure, there are many good reasons to keep it, but there are also an equal number of reasons you shouldn’t. Sometimes it is best to sell it or have your soon-to-be ex keep it instead of you. Making the right decision will be based upon your specific circumstances — there is no cut and dry answer.
Reasons You Should Keep Your House After A Divorce
There are several reasons to keep your home, but some of the bigger ones are in regard to what life will look like after the ink is dry. This can be centered around whether the couple shares children, has their own income, as well as any other assets that either side might have. All of these factors should be considered and well-thought out before a decision is made.
#1: Consistency For The Children
When people that have children separate, the biggest things that have to be determined are custody, allocation of parental responsibilities, parenting time, and visitation. If one parent is going to have the majority of the parenting time with their kids after the divorce is finalized, it might make the most sense for them to keep the house in order to keep things consistent for the children. Keeping kids in their homes, near their neighborhood friends, and school is important and would not have to change. One of the biggest factors in making sure that kids are able to have a smooth and healthy transition through their parents’ divorce is by limiting the number of big changes as much as possible. This is why the parent that has the children might consider keeping the home.
#2: You Can Afford To Pay The Mortgage And Maintain The Home
Another important factor to consider is if you are able to financially afford to keep the house. After a separation, each person is now responsible for their own set of bills, which have essentially doubled since the split. This could make affording the home they once shared next to impossible. Understanding the expenses that come with paying the mortgage and maintaining the home will be essential in deciding if you should keep the house. A detailed monthly budget will help you crunch the numbers before your decision is made. If you want to keep your home and can afford to do so, you should fight to do so.
#3: Impact Of Assets
For the majority of the time, the biggest asset a married couple accrues is their home. This has the potential to change with time and the biggest asset could become an IRA or 401K. Choosing to keep the home after your divorce might provide you with peace of mind knowing that the equity they have in their home has a smaller potential of disappearing than investing in a shaky stock market. There is comfort in knowing that you have a stable, consistent living arrangement for yourself and your family. It creates the sense of stability and security you once had.
Reasons You Shouldn’t Keep Your Home After A Divorce
There are many reasons that you should sell your shared home or let your spouse keep it in the divorce. We will discuss a few of those reasons below. These include affordability, children, or if one party has assets that make it impossible– the same reasons some choose to keep the house, are the same some are willing to walk away.
#1: You Can’t Afford The Home
When a couple separates, they have to fend for themselves and pay their own bills on their own salary. This can be difficult for those who have grown used to having a combined income. As a result, affording the home has become next to impossible. Establish a detailed budget so that you have a clear picture of who can afford the home and any upkeep that comes along with it, including unexpected repairs or replacements that might appear down the road– can you still afford it? When you stretch a person’s income to make keeping the home make sense on paper, you are setting them or yourself up for a disaster. Instead keep a realistic perspective as you prepare for what’s to come in the next chapter.
#2: Moving The Children Out Of The Home
Moving the children to a different home can be an added stressful experience for those who spend the majority of their time with one parent, as they try to process the separation and divided time. But when parenting time is divided evenly, it might seem less important to keep the home as the children won’t be living there half of the time, anyway. In this situation, moving will not have a big impact, as long as they are able to stay in the same school district. It could also be better to move to a safer neighborhood with better schools if neither party is keeping the home.
#3: Assets Can Impact Who Can Keep The Home
During the process of divorce, all property that was obtained during the marriage (known as marital or community property) should be divided equally in community property states or equitably, not necessarily 50/50. What does this mean? This means that all assets, including the home, investment accounts, retirement savings, and bank accounts, are considered in this division of property. For most, the marital home is the largest asset a couple will share. It might make the most sense to sell the home and split the proceeds or if one party is keeping the home, they pay the other person half of the equity in the home. Divorce attorneys generally like to trade horses by saying that one person is keeping assets worth a certain amount of money and the other person is keeping other assets worth the same amount which makes it a fair and equal trade. If this is not possible, having one person buy out the other or selling the home entirely becomes the only feasible plan. Selling the home can often provide each party with enough money to eliminate their debts and secure a down payment or security deposit for a new place depending on where they are moving. This can be quite the stress reliever for both parties.
Your Home Is Typically Considered Marital Property
Marital property refers to the property acquired during a marriage. If your home is considered marital property, it is left up to the laws of the state to determine who will own the home when the divorce is finalized. In most cases any property purchased during the marriage is almost always categorized as marital property and will be subject to a lawful division in the divorce. However, it is important that you understand property division in a divorce is very complex, so you should consult with a reputable divorce attorney to ensure that all assets are being equally divided. Real estate purchased before the union is called non-marital property and it is owned by only one of the spouses. But if there were major renovations done to the property during the marriage or several years of payments are made to the property, it might be transitioned to marital property. Or, in some cases, all of those payments and improvements might be placed into a contribution which will add up to a large, lump sum.
Prenups And Property Division
Some couples choose to enter a premarital agreement, or prenup, that thoroughly explains how any marital property or assets will be divided should the marriage end in a divorce. A prenup might state how much of the home, whether or not it is paid off, will be awarded to a certain party. Prenups may also document who gets the house in a divorce, regardless of any improvements or payments made during the duration of the marriage. Prenups might seem to make a future divorce easier, in the event that one might occur, however they tend to complicate things more than people realize.
Dividing Marital Property Without A Prenup
If you do not have a prenup, a court will determine how property is divided in your divorce. Depending on if a person lives in an equitable division of property state or a community property state, the court’s decision might be a little different.
Equitable Division Of Property States
In states that follow the equitable division of property guidelines, the judge tries to divide all marital property fairly, including the home. However, the term “fairly” does not always mean equally or in half, but most of the time it does. The court’s decision is centered around the individual circumstances of the couple. If children are involved, the marital home is usually awarded to the parent that will have the majority of the parenting time. If one spouse has assets in their name that exceed the value of the other’s, the judge might try to balance the assets out by giving the house to the other spouse. But this has proven to be a tricky balancing act as values are determined. In equitable division of property states, a judge is likely to order the marital home to be sold so the court is able to decide how the proceeds are divided. Because this is not an equal division, the court can choose to award it on an 80/20 basis, or something else depending on personal circumstances.
Community Property States
In community property states, any property obtained during the marriage is to be divided equally. There are very few exceptions to this clause. This means that both parties are entitled to half of everything and that includes the house. This could mean that one person will keep their pension or 401K while the other gets to keep the house. It could also mean that the house is sold and the proceeds, or any losses, are divided evenly. There are only a few states that have community property laws, and in these states, all assets acquired during the marriage are considered community property, so each spouse is entitled to 50% of everything. However, if a home was purchased by one party prior to the marriage, it is only owned by that person and is considered a separate property. But if the home is community property, one spouse cannot keep the other from their equal half. Homes cannot be divided in half so the courts will often give the house to one spouse. In turn, the other will be awarded other assets that value their equal 50% of the marital home. Couples that reside in these states can submit prenuptial agreements that will determine how the marital property is divided in the divorce.
Whether your home is considered marital or community property in divorce, neither party can legally force the other to vacate the property. This can be quite confusing if both people want to keep the house, as it can create tension between both parties. This is where it becomes important to consider your options and hire an experienced divorce attorney that can help with the process. What will happen when the divorce is finalized if neither party wants to keep the home? Issues like these need to be worked out and agreed upon between both parties or it will be up to a judge to make the decisions, which might not be ideal.
Working with a divorce attorney is the best way that you and your spouse can come to an agreement without spending time and money fighting it out in front of a judge. Contact Helmer Somers Law to discuss who should keep the marital home after the divorce. We would be happy to help you plan for what’s next.
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About Helmer Somers Law
We are committed to helping families resolve their differences and get back to their lives. We help individuals and families fight for custody of children. We protect your rights as you go through divorce proceedings. We offer the guidance and support that you will need when you are involved with the legal system. We help clients with cases involving…
- Divorce and legal separation
- Child custody and visitation
- Child support and spousal support (alimony)
- Property division
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- And other related issues