A home is often the most valuable piece of marital property. Not only does it provide a family with shelter, but it holds monetary and emotional value as well. For these reasons, couples going through a divorce often disagree over who should keep the home.
Community Property Laws
California is a community property state, which means any property acquired during the marriage is presumed to belong to both parties. For example, the house is community property if the couple:
- purchased the home together;
- purchased the home with marital funds; and
- included both names on the title.
If this is the scenario, the state assumes the property belongs to both parties and will divide it accordingly.
Sometimes, however, factors are not as clear or simple. For example, if the title is in the name of only one spouse, the state will presume that the house belongs solely to the spouse whose name is attached to the title and will classify it as separate property. For the other spouse to counteract this presumption, they must provide strong proof that the intention of the purchase was for both parties to own the home.
Separate Property Laws
If a party purchases a home before they get married, it is separate property. This type of property is not divided during divorce proceedings. However, if the other spouse contributed to the mortgage or used personal funds to improve the home, the court could decide to divide the house as community property.
How the Court Divides a Home
Couples can either agree to divide community property on their own or seek a court order from a judge. There are a few ways to divide a home:
1. Selling
Perhaps the simplest way to divide a home is to sell it and split the profits. This option is often the most feasible if neither party has enough finances to own the home on their own.
2. Buying Out
This option allows one spouse to buy out the other’s share of the home, and thus take on full financial responsibility for the property. When determining which spouse can best afford to maintain the home and all of the expenses that come along with it expenses, the following should be considered:
- mortgage payments;
- insurance payments;
- utilities, maintenance, repairs; and
- property taxes.
Sometimes a court may decide to order the selling spouse to pay the home’s mortgage as a form of alimony. The spouse who keeps the home would then claim the alimony payments as income and could be eligible to claim the mortgage in their taxes.
3. Spouses Staying on the Title (Deferred Sale)
If spouses share minor children, they may temporarily delay the sale of their home. This action is known as a deferred sale of the home order. What this means is that both spouses will continue to own the home for a pre-determined period. Usually, the parent with primary custody of the children continues to live in the marital home to minimize the impact of divorce on the children.
The court considers the following factors when deciding to permit a deferred sale:
- how long the children have lived in the house;
- the ages of the children;
- the distance between the home and the services the children use;
- if the home has been modified to accommodate disabilities;
- if a move would have an emotional impact on the children;
- if a delayed sale would have any tax consequences on either parent; and/or
- if a delayed sale would negatively impact the parent who doesn’t live in the home.
Helping Our Clients Maintain Financial Stability
At The Neshanian Law Firm, Inc, our property division attorneys can help you decide the best legal action for your family home during divorce. We understand the value of a house and will work with all parties to ensure your best interests are upheld.
To schedule your initial consultation, contact our firm online or call us at (949) 577-7935.