What Happens to a Home during Divorce?

In a divorce, though there are many settlement options for a home, the divorce decree will have the final say. The court has wide discretionary powers in deciding about the house settlement.

If the couple has children, the court usually decides with an eye on the welfare of children, their need for a stable home and their emotional stability. Irrespective of each parent’s plans or ambitions, a home for the children is the first consideration about a house in a divorce settlement.

Options Regarding the House

Co-ownership--This option is mostly incorporated into the divorce decree when both the partners have invested time, effort and money into the house and are emotionally attached to it. Usually, both the spouses retain their shares, and if and when the home is sold, they can share the proceeds/equity.

Split ownership--With this option, one spouse retains the share until a later date when the children become independent.

Sole possession--The court can rule that one partner keep up the financial responsibilities for the house after paying a lump sum to the other partner for his/her share. One spouse buys the other out. With children, the parent with custody of the children will most probably get the house. The mortgage will be transferred from the other spouse’s name, and that name will be removed from the title-deed.

Selling the House                                           

You can sell your house after or before divorce in a normal manner but proceedings vary. Often, one partner has a greater interest in the house due, for instance, to having paid more toward the down payment or having covered more costs to renovate or add value to the home. In such a situation, the court can decide that the home should belong to one of the spouses after equitable distribution. A court has the authority to order that the house be sold and that, after the mortgage has been paid off, the proceeds of the sale be divided fairly between the parties.

Marital Assets

If the house is bought during marriage, even if it is in only one partner’s name, it is considered a marital asset, and the other partner is entitled to some of the equity. All things purchased during marriage are marital assets, and both partners have rights to them.

Jointly Owned House

This is a marital asset. When the home is jointly owned, one partner cannot keep the other out without a court order. Along with a divorce petition, one spouse can file for sole, exclusive occupancy. Both, however, are responsible for mortgage payments and other maintenance costs, which are called marital debts. The sharing of marital assets and debts will be decided by the court.

Equity Division

Equity gets created by living together in the house. When the home is sold, the cash equity is divided. Even if the house was purchased by one partner before marriage, there will be other considerations for equity division, like sweat equity when the other partner had helped in maintaining it and/or contributed to mortgage payments and so on.

The divorce decree and court decisions rule the division of assets. Any deviation from the court orders will be called a violation of court orders and is punishable. You should seek legal advice in case you want to do anything different.