Read Time: 3 Min

Divorce and your House

April 22, 2013

For many divorcing persons one of their most important assets, oftentimes the most significant one, is their house. Significant not only financially, but frequently emotionally as well.

When I first meet with a client about a divorce, one of the questions I am almost always asked is what is going to happen with my house? As with many questions in divorce, the answer is complicated and depends on many factors.

One possibility is that a party may be granted what is known as exclusive use and occupancy for a specified period of time. This usually occurs when the parties have children under the age of 18. Courts now express a preference for allowing a custodial parent to remain in the marital residence until the youngest child becomes 18 unless such parent can obtain comparable housing at a lower cost or is financially incapable of maintaining the marital residence, or either spouse is in immediate need of his or her share of the sale. In actual practice this occurs more frequently where the children are in their teens than when they are younger. At the conclusion of the specified period the house is usually sold.

The person having such exclusive occupancy is generally also entirely responsible for paying all of the carrying costs of the house, such as mortgage, taxes, and utilities, and for keeping it maintained. So while exclusive use may seem the way to go, you need to ask yourself if you will be able to afford it given your own income and what amount of child and spousal support you may receive.

If exclusive use and occupancy is not indicated or economically practical, frequently one spouse will want to buy out the other spouse’s interest in the house, either in exchange for other assets or for cash. This requires an agreement as to the value of the house or obtaining an appraisal. Affordability is again frequently a problem. Your spouse will justifiably want you to refinance the existing mortgage into your own name, which is not as easily done today as it was just a few years ago. And usually you have to refinance for more than the existing mortgage to raise the funds to pay your spouse his or her share of the home’s equity, so now you’ve taken on the existing expenses of the house and even more debt than there was before! Or if you’ve traded other assets to pay same, you may have left yourself financially vulnerable in other regards.

Last, the house can be sold and the proceeds divided. This is what a court will usually order if exclusive use is not awarded to one of the parties and they cannot otherwise agree on what should be done with the house. Even where parties agree without a court order to sell, any number of matters have to be discussed and agreed upon such as choice of realtor, sale price, payment of expenses pending sale, and how the proceeds are to be used, such as paying debt, and then divided.

I’ve touched on only a few of the issues and considerations involved in making a decision about what happens to a house in a divorce. The experienced family law attorneys at Tiveron Law can provide you with informed guidance as to both the applicable law and in assessing your financial outlook going forward in order to help you make the smartest and most beneficial decision.