The issue of how a house is handled in a divorce is one of the key issues for determination after child custody – and even pet custody issues are dealt with.
The situation is common enough, given that the National Center of Health Statistics reported that in 2020 there were over 2,015,000 divorces, being 2.7 per 1000 people.
That is a hefty rate with a lot of complexities in terms of legal, emotional, financial and economic effects.
And if there is a failure to reach agreement over asset ownership then the parties to divorce face the probability of a court deciding what will happen to the family house and any other assets.
In fact in the United States there are nine states that observe ‘community property law’ which requires a 50/50 split of matrimonial assets. Upon any divorce the assets, which include not only the house and any other real estate, but also income, furniture, investments (including retirement accounts) are divided between the former spouses.
Separate property in the marriage is anything that is held in the name of just one spouse, which will often include property that is owned prior to the marriage or provided as a gift to that person.
The Community Property States
The states that have the community property law are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Residents of Alaska can opt-in to a community property agreement if they wish.
The states that do not have the community property law will therefore place high reliance upon the ability of the parties to divide the matrimonial assets subject to ‘equitable distribution’ which will see the fair distribution of assets at the discretion of the court and taking into account different factors such as the earning potential of the parties, their financial requirements, the custody of children, personal assets and suchlike.
Obviously, the preference is for the couple to decide upon the matrimonial split between themselves and have that decision sealed by the court.
Nebraska Example
Take on example, Nebraska, which is an ‘equitable distribution’ state.
As with most other states, a Nebraskan court will take into account a number of factors are considered 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 number of considerations.
Property Division Determined by the Court
As stated above, 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. An experienced divorce attorney is always a key asset in determining just what the law provides and how best to prepare yourself for the division of property, as well as helping you understand how the court uses your financial contributions in considering your equitable share of a home.
Distribution of Physical Property and Home Equity
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.
Should You Claim the Home?
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.
What are the issues to consider regarding 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.
The Divorce Difficulties
Divorce is a difficult process at the best of times and can be financially and emotionally draining. Even when the parties agree on ending the marriage, the process can be confusing without a skilled family attorney to help you understand the court paperwork and make sure that you receive a fair and equitable divorce settlement from your spouse.
Attempts to simplify the law are obviously welcome, but in doing so there remain complexities that a sound understanding of the law in any particular state, or any other jurisdiction, is required in order to ensure a satisfactory outcome is achieved.
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