When you divorce, the court has authority to divide much of the property owned by you and your spouse. If you and your spouse can agree on property division, the court likely will adopt that agreement. However, if you can’t agree, the court must make its own division decisions. The share each spouse receives, whether or not his name is on the title, is dependent on state law and varies among states and judges.
Generally, if you purchase a home during a marriage with marital funds, the home is jointly owned by you and your spouse. As jointly owned property, it is subject to equal or equitable division in the divorce, depending on state law, regardless of whether it is titled only in one spouse’s name. Community property states – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin -- typically divide assets equally between spouses. The other 41 states are equitable distribution states and their laws generally divide assets equitably between spouses.
In most states, property acquired before your marriage or by inheritance or gift remains the separate property of the spouse who acquired that property. This separate property is not typically divisible by a court in a divorce. If your spouse inherits a home during your marriage, keeps the home titled only in his name, maintains the home, and pays the taxes and insurance with his separate funds, some states will consider the home to be his separate property and not subject to division at the time of divorce. However, some states, like Connecticut, do not recognize separate property, so all property is subject to division at the time of the divorce regardless of how the property was acquired. However, the proportion given to each spouse is up to the court.
Read More: How to Divorce With Separate Bank Accounts & Splitting Property
If you live in a state that recognizes separate property and you own a home prior to your marriage or acquire it during your marriage by inheritance or gift, your house remains separate property. However, if separate property is mixed with marital property or if marital assets are used to increase the value of the separate property, the separate property or its increased value can be considered marital property. For example, if you use marital funds to maintain or improve the inherited home, any increase in the home’s value, or equity, may be considered marital property and subject to the court’s division.
If you and your spouse can reach an agreement about how your property should be divided, the court can simply adopt your agreement. If you cannot agree, the court typically uses its discretion when dividing the equity in your home and the home itself, balancing the home’s value against other marital assets. State law usually lists factors for the court to consider when dividing property, and those factors may permit the court to consider each party’s separate assets when dividing marital assets, including the home.
- Rice Law, PLLC: Frequently Asked Questions About Property
- Institute for Divorce Financial Analysis: Who Gets What?
- McKinley Irvin: How Will You Divide Your Assets & Debts in a Divorce?
- Stephens Margolin P.C.: The Oregon Divorce Blog: Divorce Property Division 101
- Women’s Divorces: Common Law vs. Community Property States
- Money Alert: Community Property
- Prince & Cotler LLC: Property Division
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