For most couples going through a divorce, the house is the single largest asset on the table, and often the most emotional one. Deciding what happens to it usually comes down to three basic paths: sell it and split the proceeds, have one spouse buy out the other’s share, or — less commonly — continue to co-own it for a period of time. By the way, the latter option is rarely a good idea.
Generally one party or neither wants the house.
After 27 years of representing parties in divorces as well as mediating countless other cases, it is very uncommon for both parties to want to keep the marital home. Generally speaking, one party really wants to stay in the house or neither party wants to keep the house and selling it becomes the obvious choice.
Community Property, Not Automatically Split Down the Middle
Texas is a community property state, which means property acquired during the marriage is treated as community property. Upon divorce, Community Property is not divided exactly 50/50. The Judge is to divide the Community Property in a “just and right” manner, and a judge can consider factors like each spouse’s earning capacity, who will have primary custody of the children, and the overall size of the marital estate when deciding how to divide things, including the house.
Separate Property Complications
If one spouse owned the home before the marriage, or received it as a gift or inheritance, it may be that spouse’s separate property. But things get more complicated when community funds were used to pay the mortgage, or make improvements, over the course of the marriage.
Selling the House
Selling and splitting the proceeds is often the cleanest option, particularly when neither spouse can afford the home on a single income or neither has a strong emotional attachment to staying. It also avoids the ongoing financial entanglement of a buyout or continued co-ownership. This can be done with a mutually agreed upon Realtor or, when necessary, a Court-Appointed Receiver.
One Spouse Keeping the House
When one spouse wants to keep the home — often to minimize disruption for the kids — that usually means offsetting the house’s value against other marital assets (retirement accounts, for example) so the other spouse still receives a fair share overall. A spouse who wants to keep the house needs to realistically confirm they can qualify for that refinance on their own income before agreeing to this path.
Refinancing the mortgage into that spouse’s name alone is not presumed and is often a critical consideration. Changes in interest rates, one’s ability to qualify on their own for a new mortgage or refinance, and a myriad of other issues should all be considered in drafting a final agreement to protect both spouses. An experienced lawyer will guide you well through your available options.
Delaying the Decision
In some cases, particularly when children are involved, couples agree to keep the house jointly for a set period — often until the youngest child finishes high school — with one spouse living there and a plan for eventual sale. This can work well for kids’ stability, but can introduce some very serious legal consequences. Before going too far down such a path in discussions with your spouse, make sure you have consulted with a lawyer so you understand the implications.
If you’re trying to figure out the right approach for your home and the rest of your marital estate, our divorce attorneys can help you weigh the options. Contact us to talk through your situation. Consultations are free. Call (972) 772-8005.
