The marital home is usually one of the largest assets a couple has and one of the more fought over items in property division. The marital home can be separate property or community property depending on when title vested and to whom title vested.
There is also the issue of who is going to live in the marital home and who is going to pay the bills for the marital home while the divorce is pending. If a spouse pays the mortgage during the pendency of the case is that spouse going to receive credit for those payments when the house is later sold or awarded? An experienced divorce attorney knows the pitfalls and how to avoid them through properly drafted orders and consideration of the “what ifs”.
If the home is separate property, it is NOT going to be divided by the Court. It will be confirmed to the person whose separate property it is. This, however, does not end the property division inquiry in most cases. There may be a reimbursement claim if any community money was spent on the marital home during the marriage. That money would be reimbursed from the separate property into the community property and then the community property would be divided. So, even if the home is separate property, it does not necessarily mean that a spouse is not entitled to any money for the house.
If the marital home is community property, then its value will be divided. This division can occur in one of several ways:
- The house can be sold during or after the divorce and the equity divided between the spouses.
- One spouse may keep the home, refinance the house into their sole name and pull out a predetermined amount as compensation to the other spouse for their portion of the community asset.
- One spouse may keep the home and the value of the home may be used to offset other assets awarded to the spouse not keeping the home.
When people try to divide the property themselves, or they hire attorneys that do not understand property division, they often do not understand what is necessary to accomplish division of a house. Common and frequent mistakes include:
- Not properly changing the title of the house, which results in having to involve the former spouse in changing the title years later when the former spouse may not cooperate or may be impossible to locate.
- Not having the right language in the final decree to order the change of title to the house, which results in further litigation later.
- Not properly valuing the marital property, which results in not being properly compensated for your portion of this asset.
- Not providing a process for determining when and how the house will be valued and payment made which results in further litigation later.
- Not requiring the spouse awarded the house to refinance the house in his/her sole name, which results in your credit being tied up in the house and possibly ruined.
- Not providing terms in the final decree to handle the situation of the spouse not qualifying for a refinance of the mortgage into their sole name, which results in more litigation later to determine what happens to the home and ruins your credit in the meantime.
An experienced divorce attorney knows what criteria are used to qualify for a mortgage so they can counsel their client on whether a spouse will be able to refinance the mortgage into their sole name. Furthermore, an experienced attorney knows what needs to be in the final decree to account for every possible problem that may arise during a sale or refinance of the home. An experienced attorney will make sure that title is properly transferred and recorded to protect property rights.
The marital home is usually one of the largest assets the parties have. It is not worth the money you will save on attorney fees to either represent yourself or to hire an inexperienced divorce attorney. If you own a home, it is critical that you hire an experienced divorce attorney to properly characterize the home, identify and trace any separate property or reimbursement claims, and to make sure that your interests are protected. Call Robin R. Zegen for a consultation today.