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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. The decision 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 carry many memories inside of it. A photo album contains memories but is not valuable (at least in terms of 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 you would 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 but one 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 so that you can 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 subject is not productive behavior. If you are concerned about how you and your spouse are going to split up the house in your divorce then read on to find out how. 

Splitting the house means figuring out if the house is 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 community or separate property. Many of you likely purchased your home during the course of your marriage with money that 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 the property as a gift or owned it prior to your marriage then the asset is likely to be part of one of your separate estates. Separate property cannot be divided in a Texas divorce. A judge has no authority to do so assuming that you are able to present evidence that the property is separate in nature. 

All of this is all 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. Separate 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 in order 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 that I provided to you above regarding commingled property may be confusing so I wanted to provide you with an example to better illustrate my point. 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 the course of time, you and your husband both deposited and withdrawn additional sums of money (all community property) into the account. After a few years, it is has become impossible to determine what dollars in the account are separate and which are community owned. Since these funds have become commingled to the point of not being able to distinguish 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 basically means that property acquired during the marriage (save for the few exceptions I mentioned earlier in today’s blog post) are to be 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 team. 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 times split 50/50 between spouses in a Texas divorce. Absent other important factors the house may be split 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 staying in it or your spouse staying in it after the divorce are about the only options you can likely undertake in your divorce. 

Oh, yea- debt is a big part of this equation, as well. You may not have thought too much about debt to this stage but it is nonetheless an important factor in your case. If your spouse and you paid community income funds towards the payment of a mortgage on a house that is your separate property then he or she may be able to be reimbursed for those payments or could take a larger cut of the community estate as a result. 

The bottom line is that it really depends on your particular situation when it comes to answering the question of how you split the marital home in a Texas divorce. Some situations are straightforward, others are less so. Before you proceed with your divorce you need to find out what the circumstances are 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 important circumstances that would impact how the marital home would be split in your divorce? 

If your divorce were to make it all the way to a judge he or she 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 find yourselves in would be relevant. For instance, your individual incomes would be reviewed in order to determine if either of you would be able to make the mortgage payments on your house using only your individual incomes. If neither of you have an income sufficient to pay the mortgage on your own then the decision to have the house sold becomes that much easier for the judge. 

Second, the judge would need to look at which parent has been awarded primary custody of your children. If you are awarded primary custody of the kids and you also have the ability to pay the mortgage using your income (plus child support, spousal maintenance, etc.) then it is likely that would 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 equity of the home. Judges like kids to have consistency and stability. Your being awarded the home in the divorce would allow increased stability and consistency in the lives of the kids. 

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 in order to raise your young son then 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 jump back into the workforce somewhat quickly then your being awarded the home is not as far-fetched.

Finally, the role that you and/or your spouse played in the breakup of the marriage would be important to take note of, as well. Many times bad 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 then this had a direct impact on 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 equity of the home 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 take on when it comes to the decision of what to in order 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 case before you ever have to see a judge. This means that you all can determine how your house is to be split. Obviously the house cannot be physically split. Neither can you agree (realistically) to share time in the house after the divorce. A split means selling the house 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 either able to remain in the house after the divorce or receive your equity share while having your spouse remain in the house. 

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 a great 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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