What Happens To The Martial Home After Divorce?
In most divorces, the martial home is easily the largest assets owned by the couple. This means it will be the centerpiece of the property division in the divorce. It also means that determining what to do with a home can quickly become a strong point of disagreement. Arguments over how to divide the interest in the martial home can easily derail negotiations regarding property division and destroy any amicable feelings the spouses have towards one another. Below is an overview of how the court will determine what happens to the martial home.
Part of every divorce proceeding is the division of property between the spouses. The court will divide all martial property—property that is acquired during the marriage—and non-martial property—property that is acquired before marriage or individually as a gift or inheritance. The court will make an “equitable distribution” of all this property, meaning a division that is fair and reasonable. This does not mean the property must be equally divided, 50/50. In fact, equitable distributions will rarely result in this type of division. This makes dividing property an area that is capable of great compromise in a divorce settlement, so long as the parties can work together. If no settlement is reached, however, the court will make the decision regarding how property is divided following a trial.
The court is instructed to look at a set of ten factors when deciding how to divide property. These factors are outlined via statute in Section 23-2802(c). They are (1) age of the parties; (2) length of the marriage; (3) martial and non-martial 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 (alimony) obligations; (8) squandering of assets by either spouse; (9) tax consequences of property division; and (10) all other relevant factors. The court looks to this factors in determining how to divide the property as a whole, as well as determining which pieces of property go to which spouse.
Options For The Martial Home
Though the path may be varied, the court will give the home to one of three owners: Spouse 1, Spouse 2, or the open market. The court may allow one spouse to maintain ownership of the home as part of the property settlement. However, the court will generally require that spouse to compensate the “evicted” spouse for the ownership interest or equity that spouse owned. This is true even if that spouse never directly made payments for the home. The court will grant a non-working spouse “credit” based on the advantages that spouse gave the couple by foregoing work for maintaining the homestead. This means that even if a house is paid for exclusively by one spouse, there will likely still be a need to make payments to compensate for ownership interest of the nonpaying spouse. This may even be true if one spouse owned the home outright prior to the marriage.
The second option for the court is selling the house and dividing the profits between the spouses. Courts will generally prefer that the home be retained by one spouse, known as a partition in kind. However, when the parties would prefer to have the property sold, the court will be open to this outcome. Additionally, the court may turn to a sale of the property when the two spouses simply cannot agree on who should own the party and the factors of Section 23-2802(c) don’t favor either party. This is the least favorable outcome for the court and will generally be reserved for extreme cases. When the house is sold, the money produced must first go towards paying off any mortgage that exists. The remaining amount is divided between the spouses as the court instructs—there is no guarantee this will be 50/50.
Avoid Losing The House
A property division can be reached by agreement of the spouses. The spouses can propose a property division to the court and that agreement will become binding upon approval. This can be an extremely useful means of ensuring that one spouse keeps the house. The spouse will have to be willing to give up other things, including other property and possibly spousal support. However, when the decision of dividing property is left to the court, a large degree of uncertainty is present. The court will make a determination of how to divide the property that may leave both sides unhappy. To be sure, the court won’t deliberately set out to upset the couple. But the couple knows their property better than the court possibly can, so the parties are in the best position to determine how they would like property to be divided. An experienced attorney will use this possibility to continuously facilitate compromise and settlement. Picking an outcome that is mostly favorable is almost always preferable to rolling the dice with the trial judge.
What will happen to the martial home is one of many questions a couple deciding to divorce will face. Tensions can be extremely high when the decision regarding who gets to keep the home is on the bargaining table. Contacting an experienced attorney is essential. Property divisions are best resolved through agreement, rather than taking a chance with the court. Experienced legal counsel will be in the best position to help you negotiate to keep your home after a divorce. Reaching settlements when spouses strongly disagree requires more than just legal knowledge. Instead, the attorney must have the experience that comes from reaching several property settlements and trying several divorces before the court. If you have questions about divorce, child custody, child support or another family law issue contact the experienced Johnson County divorce lawyers at Roth Davies.
Get your questions answered - call me for your free, 20-minute phone consultation (913) 451-9500.