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How do you split a house in a divorce?

Going through a divorce means facing difficult decisions and making choices about what is best for you and your family. Whether or not to sell your home is one of the most difficult that you can face in a divorce. Not only is it a financial asset that is likely quite valuable, but it is something that carries with it a lifetime of memories. Your car may be valuable, but I doubt you have many memories inside of it. A photo album contains memories but is not applicable (at least in dollars and cents).

What we have here, in considering the family home, is a unique piece of property. Given its uniqueness, you need to approach this subject with a little more planning and understanding than other areas of your divorce. If you can develop a plan and then act on that plan, you will likely find that your case is better off as a result. From my experience, how a couple splits the family home is a common question that seldom causes people to consider their options more than anything else in the divorce.

I think that you would be better off understanding the details associated with splitting the marital home in a divorce to start to think of what you want to see happen in the divorce. Worrying about something and then not taking any steps to learn about a subject is not productive behavior. If you are concerned about how you and your spouse will split up the house in your divorce, then read on to find out how.

Splitting the house means figuring out if the house is a community or separate property.

Before we can even begin to discuss what could or will happen in your divorce, you and your spouse must determine if the house is a community or separate property. Many of you likely purchased your home during your marriage with money you saved up from your 9-5 job. The mortgage payments have come out of the same pool of income. In a situation like this, it is pretty clear that the home is part of your community estate and thus eligible to be divided in the divorce.

Separate property is the other "column" that your property could fall into if it is not determined to be part of the community estate. If you inherited property, received it as a gift, or owned it before your marriage, then the asset is likely to be part of your separate estates. Separate property cannot be divided in a Texas divorce. A judge has no authority to do so, assuming that you can present evidence that the property is separate.

All of this is good and well, but it still doesn't answer the question of how a marital home is divided up in a divorce. The rule in Texas is that if a piece of property is not separate, it is owned by the community. This is otherwise referred to as the community property presumption. It is up to you to overcome this presumption with sufficient evidence to convince a judge that an asset is part of your separate estate if your spouse attempts to argue that it is community property.

The tricky part is that sometimes community property and separate property can become mixed up with one another. Individual property can become community property if the income/assets used by you and your spouse are combined. This is known as commingling and may take the assistance of a forensic accountant to sort through the mess and show a judge the true nature of a particular piece of property.

Example of commingled property

I realize that the description I provided to you above regarding commingled property may be confusing so I wanted to give you an example to illustrate my point better. Let's assume that you have inherited $50,000 from a deceased relative. As we talked about earlier, inherited money is typically considered to be separate property. You then take that inherited money and deposit it into a bank account that you share with your husband.

Over time, you and your husband both deposited and withdrawn additional sums of money (all community property) into the account. After a few years, it has become impossible to determine what dollars in the report are separate and community-owned. Since these funds have become commingled to the point of not distinguishing between them, the $50,000 is likely to be considered community property at this stage.

Community property- how is it split in a Texas divorce?

Since Texas is a community property state, this means that property acquired during the marriage (except the few exceptions I mentioned earlier in today's blog post) is considered community property. It doesn't matter whose name appears on the title to the house or whose income went towards its purchase. You and your spouse are teams. Your team purchased the house, and there is no designation made based on who earns more money. The house is not more of your community property than your spouse's just because you make more income than he does.

Community property is often split 50/50 between spouses in a Texas divorce. Absent other essential factors, the house may be divided according to this principle. Equity would need to be determined (the value of the home minus what is owed on the mortgage) and then split 50/50. This may come as a shock to you. Even if your spouse has never worked a day in their life, that house is just as much theirs as it is yours if you purchased it during your marriage.

In the divorce, you and your spouse need to determine what you want to see happen with the house. You don't have many options, but each one carries with it some pros and cons. It's not like you all own a herd of cattle that can be divided any number of ways. A house as a physical asset is not moveable, and it's not like you can cut it straight down the middle and divide it up that way. Selling the house, you stay in it, or your spouse staying in it after the divorce is about the only option you can likely undertake in your divorce.

Oh, yea- debt is a big part of this equation, as well. You may not have overthought about debt to this stage, but it is nonetheless an essential factor in your case. Suppose you and your spouse paid community income funds towards paying a mortgage on a house that is your separate property. In that case, they may be reimbursed for those payments or could take a more significant cut of the community estate as a result.

The bottom line is that it depends on your particular situation when it comes to answering how you split the marital home in a Texas divorce. Some conditions are straightforward; others are less so. Before you proceed with your divorce, you need to determine the circumstances for your case and make decisions based on that reality. It would make a ton of sense for you to ask an attorney before ever attempting to file for divorce yourself.

What are essential circumstances that would impact how the marital home would be split in your divorce?

If your divorce were to make it to a judge, they would look to a range of different factors when considering how to divide the house between the two of you. Let's go over a few of those factors now.

First, the financial circumstances that each of you finds yourselves in would be relevant. For instance, your incomes would be reviewed to determine if either of you would be able to make the mortgage payments on your house using only your revenues. If neither of you has an income sufficient to pay the mortgage on your own, then the decision to sell the house becomes much easier for the judge.

Second, the judge would need to look at which parent has been awarded primary custody of your children. Suppose you are awarded primary custody of the kids and can pay the mortgage using your income (plus child support, spousal maintenance, etc.). In that case, you would likely have the advantage when an awarding of the house occurs. Part of that is finding the money to pay your spouse his share in the home equity—judges like kids to have consistency and stability. Being awarded the house in the divorce would allow increased stability and consistency in the kids' lives.

Third, if you lack the financial means to afford to stay in the house right now, a judge may look to your ability to get a job that would allow you to do so. For example, if you have been out of work for three years to raise your young son, you probably wouldn't have the immediate ability to take over payments on the house if the house were awarded to you. However, if you have vocational training that allows you to quickly jump back into the workforce, you are being awarded the home is not as far-fetched.

Finally, the role that you or your spouse played in the breakup of the marriage would be essential to take note of, as well. Many times lousy behavior has more than emotional impacts on a marriage. If your spouse used community property to pay for trips and other expensive outings for a woman he kept on the side, this directly impacted your family's finances. This other woman may have never met anyone in your family besides your spouse, but her vacations and other expenditures made on her were a significant part of your case.

Or, your spouse may have used community income to gamble. That sort of wasting of community assets would likely be frowned upon heavily by a judge. As a result, your spouse may lose out on their fair share in the home's equity if it is sold in the divorce. If you own a home whose value is substantial or owe little to no money on the home, then there is a significant risk that each of you takes on when it decides what to split your house in a divorce.

Closing thoughts on how to split a house in a Texas divorce

The most likely outcome in a divorce case is that you and your spouse will settle the issue before you ever have to see a judge. This means that you all can determine how your house is to be split. The house cannot be physically divided. Neither can you agree (realistically) to share time in the place after the divorce? A split means selling the home and splitting the equity that comes out of that sale. In all likelihood, this is what will happen in your case. Otherwise, you would be able to remain in the house after the divorce or receive your equity share while having your spouse stay in the place.

If you have any questions about the material that we went over today, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free-of-charge consultations six days a week here in our office. These consultations are an excellent opportunity for you to ask questions and receive feedback about your particular circumstances. Thank you for joining us today, and we hope to see you back here tomorrow for another blog post.

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