Based on my experience as a family law attorney in southeast Texas, I can tell you that most clients have not one, but many, misconceptions or misunderstandings associated with divorce. Many of those misconceptions are in relation to what will happen with the family home in the divorce. If you have questions about this subject, then today’s blog post from the Law Office of Bryan Fagan is for you. We are going to walk you through a wide range of different subjects associated with the family home and divorce in Texas.
For starters, let’s get into one phrase that is common in temporary orders in divorce cases. Either in mediation or after a temporary orders hearing (which occurs roughly six weeks after your divorce is filed) a judge will issue a ruling that allows either you or your spouse to remain in the home during the divorce case. Legally speaking, this right is termed as “temporary exclusive use” of the home. What does this mean?
When you are granted temporary exclusive use of the home, you are told by the judge that only you may reside in the home during the course of the divorce. Your spouse may not. This is not necessarily a right that will extend to the time period after your divorce, but it is something that is granted to you for the duration of your divorce.
What this means for your spouse is that she is not allowed to enter the home except if you were to provide her with permission to do so. The home is still listed in your name, you still are responsible for making mortgage payments, but you are not able to enter at any time you would like. Some of the toughest situations in a divorce revolve around a spouse who is unwilling to accept this and will inevitably violate a court order by entering the home whenever he or she sees fit.
If you end up being the spouse who is ordered to leave the residence after a temporary orders hearing, you will need to work with your spouse on how to remove your personal property from the home. Common sense and plain old decency should help you resolve most issues associated with this tricky situation. I have seen the parent who has to move to take most of the children's clothes and even their mattresses to their new home. That leaves the parent (and most importantly the children) who stays in the home in a bad position. Having to go out and buy a new mattress, or a new wardrobe for the child is not ideal in the middle of a divorce case.
Allow technology to be your friend when it comes to removing personal property from the home
The first thing I will tell clients to do when it comes to making sure that your spouse does not "monkey around" with the property during the initial weeks of a divorce is to document all property in the home. Whether it is your separate property or community property, you should take your cell phone and video each room in your home, your dresser drawers and any safes that you own. If you are barred from your home for a few months you may forget about that piece of furniture or those photos of your family that you want to get out of the house before the divorce is finalized. Use that video inventory to help jog your memory and to keep your spouse honest about the contents of the home.
How do you know whether the house is yours, theirs or ours?
Texas is a community property state. Our state law holds that any property that was purchased, or income that was earned during the course of your marriage is presumed to be community owned. You or your spouse would have to offer an argument as to why property purchased or income earned during the marriage is not community property. All other property, mostly that which was purchased by you or your spouse prior to marriage, is considered to be separate property. Separate property is not subject to division in a divorce. Community property is.
So, as it pertains to the family home, you and your spouse will need to determine whether or not your house is community or separate property. For the vast majority of persons going through a divorce the family home is likely to be community property. Specifically, the law in Texas is that ownership of real estate (such as your family house) is traced back to the date that an initial amount of money is paid towards the purchase of the house. That is usually not the closing date for the purchase of the home. If you paid $1,000 in earnest money, got married two weeks later and then closed on the house two weeks after that, the home is your separate property.
Next, I am careful to inform clients that what you do with “gifts” of property during the marriage can have profound effects on how that property is classified in your divorce. For instance, if you were to purchase a house during the course of your marriage with separate property money (money that you earned prior to your marriage and is not co-mingled with funds earned during your marriage) and then title the house in both your name and your spouse’s name it is likely that you would effectively be conferred a community property interest upon that house and your spouse.
Likewise, if you do the same thing and then title the house in only your spouse's name, the law in Texas is that it is presumed that in doing so you are gifting the house to your spouse. If you were to get a divorce that house would likely be treated as the separate property of your spouse. You would, therefore, lose any interest you had in the house, despite using your separate property income to purchase it.
What happens in the event that the family home is refinanced?
Let’s say that your spouse owned a home prior to your getting married. You eventually got married and you moved into that house. A few years later your spouse refinanced the home loan and it now lists his name and yours. In a typical refinance situation like this one, your spouse could testify in a divorce trial that he didn’t mean to make a gift to you in refinancing the mortgage into both of your names. The refinance happened, he could argue, because that mortgage company requires both of you to sign a deed of trust because Texas is a community property state. If a foreclosure would be necessary, the lending company could not begin that process if both your and your spouse’s name were not listed on the deed of trust.
As best I can tell, when it comes to refinancing a separate property home during the course of a marriage in Texas, the house would remain the separate property of the spouse who purchased it before the marriage began. A deed of trust bearing both your name and your spouse’s name on it would not change that. However, if you or your spouse were to sign a deed that transfers a specific interest in the home to the other spouse that would change things. However, most refinances do not involve a step like this.
When could a house be jointly owned separate property?
The term “jointly owned separate property” sounds like an oxymoron but it is a real and relevant concept in divorce cases. There are four situations in which a house might qualify as jointly owned separate property. First, the house may have been purchased by you and your spouse before your marriage. Next, we occasionally see situations where the house was gifted to both you and your spouse during the course of your marriage. Otherwise, we see situations that involve your spouse who owns a separate property interest in the home who makes a gift of half their interest to you. Finally, you could inherit a home and the will states that the inheritance is intended to affect both you and your spouse.
If you are in a situation that resembles one of the above scenarios then you need to know that a court cannot award you the house in the divorce, nor can the house be awarded to your spouse. The reason for this is that the judge does not have the ability to divide up the separately owned property. Since you both have separate property interests in that joint (despite your owning it jointly) the home will have to be sold as a result of your divorce.
It is advisable to buy your spouse out of their interest in the home as a part of settlement negotiations that go on before a trial begins. Cash can be paid to that spouse or you could offer him or her another item of community property that is equal to the value of the home. Be sure to attempt to do so before a trial. A judge cannot order that this type of exchange occur.
How to value a home during a divorce
There are many online resources that can do the work of a realtor as far as locating houses in your area. You can even use these websites to provide you with their own estimate of the value of your home. Unfortunately, these estimates are not usually very accurate. As a result, I cannot recommend that you utilize them for the purposes of valuing your home for a divorce. Speak with any real estate agent or licensed home appraiser in our area and they will confirm this opinion.
If the value of your home becomes an issue in your divorce, you or your spouse can testify to its value in your opinion. You do not need to be an expert (literal or figurative) on the subject of home values in your area.
However, it is more likely that your attorney will turn to other sources in order to determine the value of your home. A real estate agent can perform a market analysis of your area to get an estimate of the value of your home. While this may not be the most accurate estimate that you can gather, it will usually work perfectly fine in most mediation/settlement conference settings.
The appraisal district for the county in which the home is located can provide you with a close estimate of what your house is worth. You can also look to your neighbors’ homes to get an idea of their value as well. This is a free resource and can be accessed online without much problem.
Finally, your and your spouse's financial statements can be viewed to determine an estimate of the value of the home. Loan applications are an example of the sort of documents that are relevant in a situation like this. If this is not an option, then you can request that a formal appraisal is conducted. An appraiser will look to comparable homes and how they recently sold in your area. These studies cost money (usually around $500) but are viewed as being the most legitimate and accurate by judges.
If you have more questions about valuing real estate in a divorce, please join us tomorrow
We will continue to discuss the topic of how to value your marital home in a Texas divorce tomorrow. If you have any questions regarding this topic or any other that we have discussed in our blog, please feel free to contact the Law Office of Bryan Fagan. We work with clients just like you who live in our community and do so with a great deal of pride. Our licensed family law attorneys offer free of charge consultations six days a week where we can answer your questions and address your concerns in a comfortable, pressure-free environment. Thank you for spending some time with us today.
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Law Office of Bryan Fagan, PLLC | Spring Divorce Lawyer
The Law Office of Bryan Fagan, PLLC routinely handles matters that affect children and families. If you have questions regarding divorce, it's important to speak with ar Spring, TX Divorce Lawyer right away to protect your rights.
A divorce lawyer in Spring TX is skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC handles Divorce cases in Spring, Texas, Cypress, Spring, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.