WHAT HAPPENS TO THE MARITAL HOME AFTER DIVORCE?
In a divorce, the marital home is typically the couple's most significant asset, making it the centerpiece of the property division. This also means that determining what will happen to the house can quickly become strongly contested. Arguments over how to divide the interest in the marital home can soon destroy any amicable feelings left between the spouses and derail negotiations regarding property division. Below is an overview of how the court determines the disposition of the marital home.
Property Division during a Divorce:
A big part of every divorce proceeding is the division of property between the spouses, including property acquired during the marriage (marital property) and property acquired before marriage or individually as a gift or inheritance (non-marital property). The court will make an “equitable distribution” of all the property. This means that the property will be divided fairly and reasonably, rather than equally divided in a 50/50 split. Equitable divisions rarely result in a 50/50 division. As long as the spouses can work together to reach a compromise on property division, a settlement can be reached. However, if no settlement is reached, the court will have to determine how to divide the property at trial.
When determining how to divide property, the court is instructed, per § 23-2802(c), to consider a set of 10 factors. These factors are: (1) age of the parties; (2) length of the marriage; (3) marital and non-marital property classifications; (4) present/future earning capacities of each spouse; (5) time, source, and manner by which the property was acquired; (6) family ties to property; (7) spousal support obligations (alimony); (8) squandering of assets by either spouse; (9) tax consequences of property division; and (10) all other relevant factors. The court uses these factors to determine how to divide the property as a whole and which individual pieces go to which spouse.
What are the Options for the Marital Home?
In the end, the home will be given to Spouse 1 or Spouse 2, or sold on the open market. The court may allow one spouse to keep the home as part of the property settlement. If one spouse keeps the home, the court will generally require that spouse to compensate the other spouse for the ownership interest or equity in the home. Even if the spouse never made any payments on the home, he or she will still be compensated. The court will grant credit to a non-working spouse based on the advantages the spouse provided to the couple by foregoing work or education to maintain the homestead. This means that a nonpaying spouse will still receive compensation even if the home is paid for exclusively by one spouse. This may also be true if one spouse owned the home outright before the marriage.
If the home is not given to either spouse, the court will sell it and divide the proceeds between the spouses. Courts typically favor giving the home to one of the spouses, known as a partition in kind. However, the court will sell the house if the parties prefer that option, cannot agree on who should own the property, or the factors of § 23-2802(c) do not favor either spouse. Selling the home is generally reserved for extreme cases because it is the least favorable outcome for the court. Once the house is sold, the money will first go towards paying off any existing mortgage. The remaining money will be divided between the spouses as instructed by the court. There is no guarantee that the funds will be split 50/50.
How to Avoid Losing the House in a Divorce?
Property division can be reached by agreement of the spouses; they can propose a property division to the court, and the agreement will become binding upon them once approved by the court. This can be an easy way to ensure that one spouse keeps the house, because the spouse can negotiate and be willing to give up other things, such as other property and spousal support, in return for keeping the home. On the other hand, when property division is left to the court, there is a high degree of uncertainty. The court's decision may leave both spouses unhappy, even though the court does not deliberately make decisions to upset them. The spouses are in the best position to determine how they would like to divide the property, as they are more familiar with it than the court. An experienced attorney will use this knowledge to pursue compromise and settlement because that will almost always be a more favorable outcome than rolling the dice with the trial judge.
One of the many questions a couple faces when deciding to divorce is what will happen to the marital home. When this issue is being decided, tensions can be extremely high for both parties. That is why contacting an experienced attorney is essential. Property agreements are best resolved through agreement, rather than taking a chance with the trial judge. Having an experienced attorney will place you in the best position to negotiate to keep your home after a divorce. Reaching a settlement when spouses strongly disagree takes more than just legal knowledge. This is where hiring an attorney with experience from reaching several property settlements and trying several divorces before the court will be critical.