A house is often one of the most significant investments that a couple makes. As a result, the fate of the marital home is often a significant source of contention when dividing property during divorce. What happens to the family home in a divorce?
Is your home marital property?
Generally, all property and debts acquired during your marriage are community property. As a result, the court can divide that property according to what is fair or “equitable.” If you purchased your house after your wedding, this would likely include your home.
In some cases, one spouse may have a claim to real estate that would otherwise be the other spouse’s separate property. If your spouse purchased the house before your marriage but paid the mortgage using marital funds, you may have a claim to a portion of the equity that resulted. In the same way, if you help increase the value of the property that your spouse owns, that appreciated value could be counted as marital property.
What are your options if your home is marital property?
Generally, you have three options available to you when dividing your home: have one spouse buy out the other’s share, sell the house and divide the proceeds or continue as co-owners.
If one spouse wants to continue as the sole owner of their home, they may choose to buy out the other’s share of the house. To ensure a fair division, they may sacrifice something of similar value to the home, including a portion of their savings or other valuable assets like a share of the family business.
Selling your home can be straightforward and provide people with additional funds as they move forward. However, people should remember that receiving a fair price for their house depends on the housing market in the area.
Co-ownership can be a valuable option for couples in some cases. For example, one spouse may need to build their finances before they can buy out the other’s portion of the home’s equity. In other cases, keeping a marital home may allow a couple to provide their children with stability by maintaining the home they know through arrangements like “birdnesting.”
While the fate of a marital home can be contentious, it is possible for divorcing people to reach a solution that supports their long-term needs.