When you’re going through a divorce, it can feel like the end of the world. The stress of losing a relationship you depended on is compounded by the details of having to split property and potentially agree to a custody arrangement.
Outside of children, the biggest complication that arises when going through a divorce is how to divide valuable assets — and a home is usually a couple’s most valuable asset.
Here’s what you need to know about what happens to your house when you get divorced.
Separate or community property
You may hear quite a few legal terms during your divorce proceedings, but a couple definitions are especially important.
First, separate property is “anything you have that you owned before you were married or before you registered your domestic partnership,” according to Marcus Morales, a divorce attorney in Santa Barbara. “Gifts received by one party and inheritance are also separate property.”
Community property, on the other hand, is “everything that spouses or domestic partners acquire during the marriage, with few exceptions. It includes everything you bought while you were married or in a domestic partnership — including debt — that is not a gift or inheritance,” according to Morales.
House purchase date
If one spouse owned the home before you were married, it will likely be considered separate property.
“This means that the spouse who purchased the house may get to keep it without paying the other spouse, or by paying less than half,” says Marcus Morales, founding attorney of Morales Law.
If you and your spouse bought a home while you were married, it may be community property, which means you both are entitled to an equal portion of the equity, Morales says.
Name on the deed
One factor a court will consider is whose name is on the deed. Even if you bought a house while married, that doesn’t mean both names will be on the deed.
“During marriage, people refinance and often get bad advice from escrow companies or loan officers to change the title from one spouse to both spouses,” Morales says. “This may have an effect on how the court determines how much of the house each person is entitled to.”
Down payment source
Another factor that comes into play is where the money came from for the down payment.
“Did you or your spouse use a savings account with money earned before the marriage or money from a separate gift or inheritance? If so, the person who supplied that funding may be entitled to reimbursement” Morales says.
Who lives in the house?
When one of you plans to continue living in the house after a divorce, a Watts charge may come into play.
“If a Watts charge is applicable, the spouse with exclusive use of the community property may be obligated to pay the other spouse the fair rental value for the use of the property,” Morales says.
“Courts will entertain a request to remove one spouse from the property. While so-called ‘kick-out’ orders are difficult to obtain, they are the rule, and not the exception, in domestic violence cases” Morales says. Additionally, parties may receive an order to remove a spouse from the home if it is in the children’s best interest.
Divorce proceedings can be tough, which is why an experienced divorce attorney who knows the ins and outs of the law is essential.