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How to protect your home in a Texas divorce

When you become involved in a divorce you will find that you will soon encounter a series of difficult decisions. Every divorce is unique, but regardless of the specific factors involved in your case, there are certain situations that everyone must handle or take care of. When it comes to property division you and your spouse are going to need to figure out what property is divisible in the divorce (community property) and what property belongs to either one of you separately from the other (separate property). From there, you can negotiate on the community property division- spending as much time as you need to get this subject right the first time.

One of the most difficult decisions which you and your spouse will need to make is how to handle the family home in a divorce. If you own a home and purchased the house during your marriage, then you are looking at a home that is community property and will need to be sorted out in the divorce. This may involve thinking hard about your future and assessing where you are from a familial and relational perspective honestly. What you decide upon will shape your future in a big way.

If your goal is to keep the house in your divorce, then you are not alone. Many people in your shoes would like to be able to maintain ownership of the home after the divorce comes to an end. You may see the real estate market in our area and think that you would never be able to purchase a comparable home for a similar mortgage payment. Especially given the fact that you may have to pay your spouse for her portion of the equity in the home immediately after the divorce comes to an end.

Having young children may mean that you want to promote the stability of their home environment more than you would were you the parent of an older child. For example, let’s say that you are going to become the primary conservator of your children. This means that your kids are going to live with you during the school week and have visitation with your co-parent on alternating weekends. If that describes your current situation, then you may like the idea of your children being able to get ready for school each morning in the house they grew up in. For that reason, keeping the house in your divorce may be a serious goal of yours.

There’s nothing wrong with sentimentality, but be practical, as well

One of the most important parts of this discussion on how to handle situations in a divorce that involve the family house is that it is ok to be sentimental about your home. Sure, I can imagine that you have some negative memories in that house but if you want to stay in the house after the divorce, I imagine that you are also thinking about positive memories and associations you have with those four walls. First steps of your children, backyard fun in the pool, and Christmas morning in the living room. These are all good reasons to have a sentimental attachment to the home.

There is something about a house, perhaps more so than anything else we buy, which means that we attach emotion to this purchase. Think about how you approached the purchase of the home. Did you go over the asking price? Was this the house that you had your eye on for some time and you were not going to let anything get in the way of your buying it? That is the emotion that may rise again when it comes time to confront the decision of whether to sell the home, leave the home or stay in the home during the divorce.

For today’s blog post from the Law Office of Bryan Fagan, we are going to be operating under the assumption that you would like to stay in the family home even after your divorce comes to an end. When you decide to stay in the family home after your divorce and that is how you are going to negotiate it is ok to be sentimental and approach the situation with some emotion. However, you also need to be practical and intentional about how you make decisions and negotiate this subject.

Going into the divorce with an attitude that you need to remain in the house for whatever reason is a position which could leave you in an untenable position once the divorce ends. The attorneys at the Law Office of Bryan Fagan counsel our clients to consider whether staying in the home makes sense for you and your children. For the remainder of today’s blog post, we are going to walk you through how to think about this issue and how to be intentional about making up your mind about the family home, and how you should approach the subject of it.

When I say intentional, I mean that you need to have some intent with the things you decide. Do things on purpose. Don’t let things happen to you. Rather, be the one with a plan and with a mindset about how you are going to be able to approach this subject from a position of strength rather than a position of weakness. You can wander into this subject but if you wander out of it there is a very good chance that you may regret not having had a plan in the first place. The first question we need to ask ourselves is how we can develop or finetune a plan if we do not already have one.

The first place I would look for information on whether to keep the family home in a divorce is to come in for a free-of-charge consultation with the Law Office of Bryan Fagan. Our licensed family law attorneys offer these consultations six days a week in person, over the phone, and via video. No matter, if you are sure that keeping the house is a good idea or are directionless, a consultation with our attorneys, can serve you well.

Where are you financially?

This is a question that everyone who goes through a divorce needs to ask themselves. Without a doubt, you need to be able to afford to keep your house if you decide that this is what you want. It happens so frequently in a divorce that a person whose heart is in the right place decides to take on the responsibility of keeping the family home after the divorce. We have already walked through some of those motivating factors which may be relevant to your situation. Whether we have talked about your reason or not, the point is that no matter why you want to keep the house it is a massive responsibility.

That is probably something that you already knew. Think about all the day-to-day upkeep, maintenance, and stressors associated with the house. For some of you, it may be easier to handle these issues now that you are getting a divorce. Your spouse may have contributed nothing to any of these areas or even hindered your ability to perform them. Now that you are on your own you do not have to answer to him or her about their concerns over anything in the home itself. You have autonomy over the house and can decide how to approach the day-to-day care for the house.

However, even if the idea of having your spouse out of the house makes keeping the home even more attractive, at the end of the day you need to be able to afford the house and everything that comes along with it. This should not be a quick calculation you perform about whether you have the funds to justify keeping the house. Rather, you need to seriously consider where you are financially, where you need to be from a planning perspective, and how keeping the house fits into that equation.

When it comes to the big money items associated with a house, we all know that the mortgage is first and foremost. When you applied for a mortgage the first time on the house you likely did so with your spouse. Both your income, credit history, and ability to pay were gauged by the lender before making an offer on loan terms. Now that you are going through a divorce you will need to consider, first, whether you can afford to pay the mortgage as it stands with your current payment. How much of your income are you comfortable paying toward a mortgage each month? Some financial advisors will tell you that no more than 25% of your take-home pay should go toward a mortgage.

Next, whether you have a mortgage on the home or not, there are property taxes and homeowner’s insurance to concern yourself with. You may have been reading the news articles concerning how the State Legislature just passed a bill that will be signed into law the purpose of which is to provide property tax relief. This is something to consider given that property taxes in Texas are a huge burden on homeowners. While the state has no state income tax, our property taxes are pegged to the value of your home as set by an appraisal district for your area. As area home prices have increased dramatically in recent years so, too, have our property taxes.

The easy comparison for a person in your shoes to make is what monthly mortgage costs would be versus what monthly rental costs would be for a similar home in your area. A justification that people use time and again is that if the rent on a home is nearly the same as a monthly mortgage payment it would make sense to own the home so you can at least be paying money toward and asset that you hope to own free and clear of any loan in the future. This is faulty reasoning, however, given that you need to consider the added expenses which are a part of home ownership like maintenance and utilities.

A hypothetical situation that I like to run through with clients who are in your position goes something like this. Imagine that you find yourself one week removed from the divorce. The ink is not yet dry on your final decree of divorce, but you are sleeping in your bed in your own home which was the most significant goal which you achieved in the divorce case. However, you came home from work one day to find that you had no warm water. You went into the garage to check on the water heater and the pilot light was out and was not functioning. When you called the plumbing company to see about a repair, they let you know that a new water heater was going to need to be purchased.

If that is what you heard immediately after your divorce, how would you react? For many of you, it would be with shock and major concern. That major concern would be justified given that you likely just spent a good chunk of your savings on buying your spouse out of her share of the home. Either you had cash on hand which you could use to pay your spouse for a portion of the equity, sell stock to raise the funds necessary, refinance the mortgage and take cash out or commit to a long-term payment plan where you would pay your spouse a certain amount of money each month until she is made whole from her portion of the equity.

This is not an unrealistic situation whatsoever. Something like this will likely happen in the period immediately after your divorce. A water heater breaking down, your air conditioning system needing a part replaced or a roof leak are common examples of household maintenance that you would need to be responsible for if You become the sole owner of your home after the divorce.

What to do if you end up not wanting to keep the family home

It may not be the easiest thing in the world to understand that you cannot afford to keep your home after the divorce. Let’s put the shoe on the other foot for a moment. Suppose that You end up figuring out that you are not able to take on the responsibility of home ownership after your divorce. As a result, your spouse has instead stepped in and said that she wants to stay at home. If she has the financial wherewithal to do so there are some additional considerations for you to contemplate as you prepare for your divorce.

First, you would need to go through the same analysis we did a moment ago as far as how you want to be compensated for your share of the equity in the home. There are many ways for you to attack this subject and the specific circumstances of your case will play a large part in how new ultimately determine this division should unfold. Many times, the trickiest part of deciding on this subject is to do so in a way that will minimize the amount of time that you are reliant upon your ex-spouse for payment. You do not want to be in a position where your spouse must pay you a relatively small amount of money over a long period. This increases the likelihood that she will eventually lose interest in making these payments or otherwise be unable to make them. If you can negotiate for a quick payout or a more favorable property division settlement, then that may be for the best.

Otherwise, talk with your spouse about how you can go about the legal means of separating you from the house. As far as the title to your home is concerned you may sign a special warranty deed which will deed your interest in the home to your spouse. This will give her complete ownership of the home in her name only as far as your county clerk is concerned.

The next consideration that you need to pay some mind to is how the mortgage on the home is going to be handled. This is assuming that your name appears on the mortgage at all. A mortgage company will not simply remove your name from their mortgage because of your divorce case settlement. Frankly, the mortgage company does not care if you are no longer married to your spouse. It expects payment and your name is on the note which puts you in a position of liability if a payment cannot be made. Working with an experienced family law attorney can help you to reduce your level of liability in a situation like this.

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