The Complications That Can Arise in Divorce When Looking At ‘Who Gets The House?

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Among the many emotional and financial issues surrounding divorce is one key question:  “Who gets the house?’

The answer is not altogether straight forward as different states have different laws relating to property ownership and the division of assets during a divorce.

As a divorce attorney in Nebraska, for instance, the issue is an equitable property state (described below), where agreement will determine how the matrimonial assets are divided.

However there are also community property states where the split is fifty-fifty, which permits the ongoing entitlement to the home. The ‘assets’ mean those acquired by one or other (or both) spouses during their marriage while living in one of the states and regardless of who actually purchased it.

The community property states include  Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Alaska is not a community property state but does have an ‘opt-in’ community property law that lets spouses divide their property by community property agreement although it is not mandatory.

However, in an equitable distribution state, the judge will divide the property on the basis of ‘equity’, which may well not mean it is a fifty-fifty deal.

Exceptions to Community Property

There are exceptions to community property law, using a common law property definition to determine what the ownership of assets that have been acquired after marriage actually are.

For instance, if one spouse acquired separate property, like the house, during the marriage then it is that person’s unless it is registered or listed under both names.

But there are also cases where a couple may be exempted from the provisions of a community property law, such as where the property is a gift to a single spouse, or where (like many houses) are received through inheritance or via a trust or gift.  Or the house or other matrimonial property asset may have been acquired before the marriage or while the spouses were separated or living apart.

The date you acquired the house is an important piece of information in a divorce. Both in community and equitable distribution states, a judge can’t award your separate property to your spouse. Property is usually designated as separate if it was a gift or inheritance or it was acquired before the marriage. Generally, spouses keep their own separate property in a divorce.

Who Gets the House?

As mentioned, Nebraska is an equitable distribution state and so a number of factors  when determining how property and assets should be divided, including the length of time the marriage lasted, what each individual has contributed to the marriage in that time, and what each individual will need to move forward after the divorce.

In the case of an indivisible possession such as a house, the court usually considers both the physical property and home equity when determining who – if anyone – is ultimately allowed to possess the home. When deciding whether one party or the other gets the house, or whether the house is sold and the profits divided between the divorced couple, there are a few things to consider.

If the house is a marital or partially marital property, the court will divide the property’s home equity between the two parties. If one party is granted the physical dwelling, that is considered towards their share of the equity, and they can choose to purchase the remaining equity from the other party.

It is these determinations by the Court that require an experienced divorce attorney to work out just what the financial contributions are and how the equitable distribution of the asset should be determined.

Property Division Determined by Court

Possessions are categorized as marital, non-marital, or partially marital. Marital possessions are acquired jointly by the couple during their marriage and are generally divided evenly between them.

Non-marital possessions are acquired by each individual outside of the bounds of their marriage and will not be considered for division (i.e., inherited property or property owned before the marriage is usually not eligible to be divided in a divorce settlement)

Partially marital possessions are those that were acquired by individuals separately from the marriage, but then the other individual contributed to payments or upkeep during the marriage.

This issue often arises with homes or financial assets. In these situations, the court will determine how much each individual has contributed to the mortgage compared to how long the home was owned prior to the marriage and divide home ownership or equity accordingly.

Considerations on “Keeping the House”

Before deciding to fight for a house in court, consider whether ownership of the home would truly benefit you. Can you keep up with household bills on a single budget – including the mortgage, equity payments to your ex-spouse, insurance, taxes, utilities, and repairs? If neither party can afford the house on their own, it may be best to sell and divide the profits.

Another consideration is the presence of any children, especially if they are school age. If one parent has greater custody of the children, they would probably be best suited to keep the house, so the children have some stability through their home and school during this time.

Divorce is a difficult process and can be financially and emotionally draining. Even if you and your spouse agree on ending your marriage, the process can be confusing when trying to determine what is an equitable and fair distribution of matrimonial assets.  

Source: James Hoppe Law Office

 

 

 

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