Your family home is probably your most valuable marital asset. When going through a divorce, it’s crucial to know who gets the family home.
The general rule is that during a divorce, spouses have the right to decide what to do with the family home. You can decide to sell the home and divide the proceeds as you see fit, or you can decide that one spouse keeps the house and the other receives additional assets. If you are unable to agree on what to do with the family home, a judge will make the decision for you.
There are several things to consider when deciding what to do with the family home during a divorce. This article will look at the issues and give some solutions.
Is Your Home Marital or Non-Marital Property? Why This Matters
There are a few questions you need answers to before you can decide who gets the family home in a divorce. The first question is, “Who owns the house?” In the majority of divorce cases, it will be clear that both spouses own the home.
However, it isn’t always the case. Homes can be non-marital or marital property, depending on the situation. How your family home is categorized by the court during a divorce can have a huge impact on the division of property.
What is Marital Property, and Why Does it Matter?
You must first determine whether the house is marital or non-marital property before you can determine what will be done with it during a divorce. Most courts consider the following types of property to be marital property:
- All property acquired by either or both spouses during the marriage up to the final divorce decree, regardless of how the property is titled. This would include houses, condos, cars, boats, furniture, bank accounts, etc.
- The value of vested and unvested pension, stock option rights, retirement accounts, or other fringe benefit rights relating to employment accrued during the marriage.
- Recovery in personal injury, workers’ compensation, social security disability actions for lost wages during the marriage, reimbursement for medical bills incurred and paid with marital property, and property damage to marital property.
If the divorce court decides that your house is marital property, it will be treated as a marital asset that will be divided during the divorce.
If the parties cannot agree on which spouse gets the house, the court will order an equitable distribution of each spouse’s share of the home or order it to be sold during the divorce proceeding.
What is Non-Marital or Separate Property?
It is important to know if the divorce court will consider your family home to be non-marital or separate property. Most of the time, the courts consider the following types of property to be non-marital or separate property:
- All real and personal property owned by a spouse before marriage, including assets held in individual retirement accounts.
- Property acquired in exchange for property acquired before the marriage.
- Property acquired by a spouse at any time by gift or inheritance.
- Income from and appreciation in the value of the non-marital property.
- Pain and suffering awards, victims of crime compensation awards, future medical expenses, and future lost wages.
- Property acquired by a spouse after an order of legal separation.
If your family home is non-marital or separate property, the court will not divide it as part of the divorce process. Instead, you or your spouse will be given full ownership of the property.
Even though the non-marital property is not divided during a divorce, the value of the non-marital property can be taken into consideration by the court when deciding how to divide the marital property equitably.
The burden of proving that a home is a non-marital property rests with the spouse making that claim. Keep in mind that non-marital property may occasionally become marital property during the course of a marriage.
This happens if one spouse gifts the asset into the marital estate or changes the title so that both spouses’ names are on the title. In most cases, the mixing or commingling of marital and non-marital property does make the non-marital property become marital property.
Who Decides Who Gets the Family Home in a Divorce?
One of the main concerns for the majority of couples going through a divorce is deciding who gets the family home. Making this decision involves weighing a number of factors, such as where the children will live and whether you will still be able to afford the house once your incomes are divided.
Legal Tip: I always tell my clients to try to work out a plan of action with their spouse regarding what they want to do with the family home. If you don’t, the judge will decide for you, and that may be a decision you do not agree with but have no power to change.
The general rule is that during a divorce, spouses have the right to decide what to do with the family home. You can decide to sell the home and divide the proceeds as you see fit, or you can decide that one spouse keeps the house and the other receives additional assets. If you are unable to agree on what to do with the family home, a judge will make the decision for you.
You’ll save time, money, and aggravation if you and your spouse can figure out what to do with the family home. I always advise my clients to make this decision for themselves, if at all possible.
Making a decision you can live with is preferable to leaving it up to the judge, who may then make a decision you struggle with for the rest of your life.
If you choose to let the judge decide, you are trusting a complete stranger to make the best decision. Although the judge has experience making these choices, it is frequently wiser to make them yourself prior to the case going to trial.
What Factors Will the Court Consider When Deciding Who Gets the Family Home in a Divorce?
If you and your spouse cannot agree on what to do with the marital home, the judge will make the decision for you. There are several things a judge will take into consideration in deciding what to do with the family home.
Generally, courts consider the length of the marriage and who has primary custody of the children when determining what to do with the family home. If there are kids involved, the court must decide whether it is in their best interests for them to remain in the family home.
Additionally, the court will consider the earning capacity of each spouse as well as the amount of alimony and child support being paid when deciding what to do with the family home.
In cases where both spouses are interested in keeping the family home and cannot agree on who should have it, the court will determine who gets the house and how much it is worth. A court will take the following things into account when deciding how to equitable divide the family home:
- The age, education, background, and earning capacity of both spouses.
- The duration of the marriage.
- The standard of living during the marriage.
- The present income of both spouses, along with their vocational skills and employability.
- The sources of money used to purchase the family home.
- The health of each spouse.
- The assets, debts, and liabilities of each spouse.
- The needs of each spouse.
- Is it in the best interest of the kids to stay in the family home with the custodial parent?
- Each spouse’s contribution as a homemaker to the family.
- Whether either spouse has diminished the value of marital assets by wrongful conduct, like gambling losses or paying for a mistress.
- Marital fault – this is generally not considered by the courts but it can be.
Before deciding who gets the family home or if it should be sold, the judge will carefully think about all of the above factors. After considering all factors, the court will either award the family home to one of the spouses or issue an order that the house should be sold and the proceeds distributed equitably.
Who Gets the Family Home in a Divorce with Kids?
Children suffer trauma during divorce, so it’s often best to keep them in the family home so they can stay at their current schools, neighborhoods, and with their current friends to try to minimize the disruption to their lives. Although it doesn’t always happen that way, the court will do everything it can to minimize the impact divorce has on the children.
In most cases, the court will award the custodial parent the family home. The court will do this to provide as much stability for the children as possible. As long as it is financially feasible to do so, the court will typically award the family home to the custodial parent if it finds that it is in the children’s best interests to remain there.
When there are minor children involved in a divorce, the following factors may be taken into account by the court when determining who gets the marital home:
- Which spouse is living in the house on the divorce date?
- Which parent has primary overnight custody of the children at the time of the divorce?
- Are the children still living in the family home at the time of the divorce?
- Which spouse has been covering the mortgage and insurance costs on the date of the divorce?
- Which spouse has been in charge of the house’s general upkeep and payment of the utilities?
- Whether the spouse who is asking for the house can actually afford it.
The court will do everything in its power to minimize disruption to the lives of the kids. If the court determines that it is in the best interest of the child for it to stay in the family home, it is likely to award the family home to the custodial parent.
What are Some Common Approaches to Handling the Family Home in a Divorce?
There are typically three options for what to do with the family home during a divorce. The option chosen will vary depending on the objectives of each spouse and whether or not there are kids involved.
During a divorce, the family home will typically be handled in one of three ways:
- The spouses will agree that the home will be sold, and they will split the proceeds.
- The spouses will agree that the family home is kept and one spouse buys out the other.
- The spouses will reach an agreement to keep the house and sell it later.
You should weigh all three options as you navigate your divorce. The most important details regarding each option are listed below.
Option 1 – Sell the Family Home and Divide the Proceeds
Couples who decide to sell the marital home before the divorce is finalized will have the simplest time dividing the equity. Once the sale is final, the mortgage can be paid off, and any leftover equity can be divided. The proceeds of the sale can then be applied to new costs that arise as a result of a divorce, such as the deposit for a new home or apartment and moving expenses.
If you choose this option, make sure to get a professional real estate appraisal so you know how much the marital home is worth.
You should also work with a real estate agent or an attorney who specializes in real estate so they can give you advice on the market value of your house, walk you through the potential sale price, and show you how much money will be left over after all closing costs are paid.
Option 2 – The Family Home is Kept by One Spouse Who Buys Out the Other Spouse
If you choose this option, you will have to work on a mortgage refinance so you can buy out your spouse. Typically, a buyout takes place at the same time that the original mortgage is refinanced. The spouse who wants to buy the family home applies for a new loan in their own name, borrowing enough cash to pay off the prior loan and pay the equity buyout to the other spouse.
If you’re thinking about buying your spouse out of the family home, talk to a mortgage lender to determine whether you can actually afford it. A spouse will frequently want to purchase the family home only to learn that their income is too low to qualify for a new mortgage. The moment you decide to buy your ex-spouse out of the marital home, you should start looking into financing.
Option 3 – Own the House Together for Now and Sell It Later
While this is an uncommon approach, it happens when the spouses agree that selling the house now would cause too much disruption. For example, they may have kids and decide to sell the home when the kids graduate from school. If you decide to keep the house, make sure the person paying the mortgage does not skip a payment, as this could have long-term consequences for both of you.
Consult with a lawyer to determine exactly how the mortgage will be handled while the property is in both names and when to remove your ex from the mortgage. You might also need the assistance of a tax expert with experience in divorce who can explain the effects of mortgage interest and capital gains taxes if you sell either before or after your divorce.
Keep in mind that the lawyers working for you have no personal stake in how you divide the family home. These professionals are available to help you so that you and your ex-spouse can weigh the advantages and disadvantages of each option and choose the best way to handle the division of your family home.
Who Gets to Live in the Home During a Divorce?
This question comes up when a couple is going through a divorce and neither party wants to move out of the family home. This is rare, because most of the time, one partner will leave on their own when they first decide to split up.
As a general rule, you are not required to leave the family home simply because a divorce has been filed. The filing of a divorce is simply the beginning of a lawsuit. The only way you would be forced to move out of the family home would be if a judge issued an order directing you to do so. Without a court order, you have the right to stay in the family home.
Although you are not required to leave the family home at the time the divorce is filed, a court could issue an order requiring you to leave the family home. It’s not unusual for one spouse to ask the court for sole possession of the family home while the divorce is being worked out.
This kind of request is frequently made if there have been heated arguments between the parties or significant tension that may be spilling over in front of the kids. These concerns will be addressed during a hearing, and the judge will decide if you must leave the family home.
Anytime domestic abuse occurs, the court is likely to order one spouse to leave the family home. In these kinds of situations, a restraining order can be used to force the violent spouse to leave the house. Once a restraining order is issued, the other spouse can be arrested if they attempt to return to the family home in violation of the restraining order.