Dividing up property during a divorce can be incredibly stressful, both emotionally and financially. For many couples, the family home is the biggest shared asset at stake in the separation. Determining who gets to keep living in the home versus selling it and splitting proceeds can become a major point of contention. This article explains the different factors taken into account when deciding who keeps the house in a divorce, typical approaches used for assigning the property, and what your options are if you and your spouse can’t reach an agreement. Understanding the process can help reduce some of the anxiety around this major life change.
Divorce Property Division Basics
When a couple gets divorced, marital property like houses, cars, bank accounts, and other assets are divided through a process called equitable distribution. The default in most states is an equal 50/50 split of marital assets, but the specifics depend on each state’s laws. In Florida, when couples divorce, the division of their marital home is governed by the state’s equitable distribution laws, which aim to distribute assets, in a fair and equitable manner based on various factors such as each spouse’s contribution, income, and the length of the marriage.
The primary residence is typically viewed as shared marital property regardless of how titles are held. However, aspects like who paid the down payment or who has been making mortgage payments can factor in.
Determining Who Keeps the House
There are several considerations that influence which spouse ends up with possession of the family home:
- Custody arrangements – Keeping kids in the same home is often deemed ideal.
- Sentimental attachments – One spouse may feel stronger ties to the home.
- Financial standing – Incomes, debts, and credit scores help determine affordability.
- Other assets – Home value compared to pensions, savings, etc. guides division.
- Ongoing expenses – Costs like taxes, insurance, utilities, and upkeep.
State divorce laws list factors judges examine when allocating property, whether through settlement or court order. Experienced divorce attorneys can forecast likely outcomes.
Selling the House and Splitting Proceeds
Sometimes neither spouse can afford to keep the house on their own or they cannot agree on who should retain ownership. In these cases, selling the home and evenly dividing net proceeds may be necessary. After paying off any outstanding mortgages and taxes, the remaining profit is split pursuant to the divorce decree. There may also be tax implications for couples who have to sell before living in the home 2+ years.
Buyout Agreements
With a buyout agreement, one spouse keeps possession of the house and buys out the other spouse’s share of equity. Determining the fair buyout price involves appraisals, loan amounts, and more. The buying spouse has to secure financing and their income must support owning the home solo. Terms for repayment of the buyout amount to the other spouse are negotiated.
Budgeting for Sole Home Ownership
Taking sole ownership of the family home after a divorce also means taking on all associated financial obligations on your own. It is critical to budget carefully and ensure you can realistically afford all ongoing home-related expenses, including mortgage payments, property taxes, homeowners insurance, maintenance costs, utilities, and more. Budgeting post divorce, when your income may be reduced but you no longer have your former spouse to share costs with. Meet with a financial advisor to go over the full budget impact of keeping the home before agreeing to be awarded the property in your settlement. Having a clear understanding of the carrying costs involved will help prevent struggles down the road.
Modifying the Mortgage or Title
Once the court rules on property division, the spouse keeping the house will likely need to modify the mortgage and title. This involves several steps:
- Refinancing the mortgage into their name only, if there was previously joint ownership.
- Providing the lender with the divorce decree and documentation.
- Removing the non-retaining spouse from the property title.
- Recording quitclaim deeds to formally transfer ownership.
- Taking over sole responsibility for mortgage payments, insurance, taxes, etc.
An attorney can help navigate the process with lenders and facilitate title changes smoothly. The goal is to make sure ownership and obligations match the divorce judgement.
The following is a DRAMATIZATION AND IS NOT AN ACTUAL EVENT: If Sandra was awarded the house, her lawyer would work with the bank to refinance the mortgage into her name only. Her ex-husband Alan would also sign a quitclaim deed transferring his share of ownership completely to Sandra per the decree.
Conclusion
The following is a DRAMATIZATION AND IS NOT AN ACTUAL EVENT: Sandra was awarded the family home in her divorce settlement with Alan. Based on incomes and custody, the judge ruled it was in the children’s best interests to stay there. Alan was still entitled to half the appraised value, so Sandra took out a loan to pay him his equity share.
Dividing real estate equitably during a divorce can get complicated quickly. An experienced family law attorney can help ensure you receive a fair property settlement. Contact Brandon Legal Group today for a consultation. We help clients like Sandra and Alan navigate property division in a thoughtful manner. Call (813) 902-3576 now to discuss your situation – initial consultations are free.
FAQs
1. What if both spouses want the house?
The court will examine factors like income, custody, and connections to determine who gets the house if spouses both want it.
2. How soon must the house be sold after divorce?
There is no set time frame. The divorce decree will specify a date or terms for listing and selling the home.
3. Who decides who gets the house in a divorce?
The spouses can decide through settlement agreements, or the family court judge decides based on equitable distribution laws if they cannot agree.
4. What if the house is underwater?
If the mortgage debt is higher than the home value, the judge determines responsibility for the remaining loan balance as part of the property division.
5. Can the house be split between divorcing spouses?
No, awarding partial ownership percentages of a house is rarely feasible. One spouse typically is granted full ownership and responsibility.
