Whether you recently found the perfect place or have spent years making improvements, your home means a lot to you. If you and your spouse decide to go your separate ways, though, will you be able to stay in the home you love? What happens to your home during the divorce process?
Who owns your home?
Often, the fate of your home depends on whether the court considers it marital property. While you and your spouse may have shared the house, if one of you owned your home before the wedding then they may be the sole owner of the house after divorce. Your house may also be nonmarital property if one of you received it as a part of an inheritance or if you have a prenuptial agreement in place.
However, if you acquired your house during your marriage or if it became commingled as a result of using marital funds to pay for improvements, for example, the court will likely view it as marital property. This means that your house would be jointly owned and divided, like the rest of your property, according to what is fair or “equitable.”
What can happen to your house during equitable distribution?
Generally, you and your spouse have three options when it comes to your home: one of you can keep your house, you can sell your home or you can continue as co-owners.
While selling your home and dividing the money you receive may be the simplest option, it can also come with some unique challenges. You may need to wait until the sale is finalized, which can delay the division of your property. You may also receive a less favorable amount if you do not wait or if the housing market in your area is less favorable.
For one of you to keep your house, you will need to consider the cost of refinancing. You will also likely need to sacrifice other valuable property or a larger segment of your savings to ensure that division remains fair.
Moving forward as co-owners can allow you to wait for a more favorable sale price or keep your kids in the home they know, but it also requires you and your spouse to work together to maintain the house.
Whether you want to keep your home or make a sale to give yourself a stronger financial foundation after divorce, you can find a solution that achieves your unique goals.