Who gets the house in a divorce is one of the most difficult questions to answer.
Because a house is typically the most valuable asset a couple owns, when it comes to the division of property in a divorce, who gets the house takes on outsized significance.
To help you navigate this tricky topic, I’m going to share 7 important questions you need to ask (and answer) which will help you decide who gets the house in your divorce.
1.) In what state will you file for divorce?
When it comes to dividing marital property and debts in a divorce, one of two concepts will be used, depending on the state in which you file. Either Equitable Distribution or Community Property Division.
Please keep in mind what I’m about to share is an extreme simplification of how the division of property in a divorce works.
Equitable Distribution States:
Equitable Distribution is defined as “the fair, but not necessarily equal, division of a couple’s property and debts acquired during the marriage,” and is used to divide property and debts in states including New Jersey, New York, Illinois, Pennsylvania, Michigan, and 36 others.
In these states, you and your spouse have complete control over what your agreement looks like and it’s the two of you who can negotiate and decide who gets the house in your divorce.
In my experience as a mediator, some of the couples I’ve worked with who reside in equitable distribution states have simply assigned the house to one spouse. With the other spouse receiving nothing in return for doing so.
A literal interpretation of the whole “fair but not necessarily equal” concept.
Whereas other couples have required the spouse who receives the home to buy the other spouse out. Either with a cash out re-financing of the property, or by trading the home for other assets.
Community Property States:
The other concept used to divide property in a divorce is Community Property Division.
In Community Property states like California, Washington State and 7 others, property and debts acquired during the marriage are considered belonging to both spouses (i.e. “the community”) equally.
In these states, assets and liabilities are generally divided 50-50. Which means each spouse would receive an equal share of the house.
In my experience, it’s less likely that couples who live in community property states will simply allow one spouse to receive the house without the other receiving any form of compensation.
But even in a Community Property state, you can still negotiate who gets the house in a divorce. It just takes a little more effort and creativity to do so.
2.) What method are you using to get your divorce?
Just like there are two property division concepts in the United States, there are also two property division methodologies: cooperative negotiation and litigation.
Cooperative Negotiation:
When it comes to cooperative negotiation, there are actually two “sub-methodologies” included in this category: divorce mediation and collaborative law.
In divorce mediation, you and your spouse would hire one, neutral third-party mediator knowledgeable in the issues of divorce, to facilitate direct negotiations between you.
While in the collaborative law process, rather than hiring one, neutral third-party mediator, you would each hire your own lawyer trained in the collaborative process to facilitate negotiations between you and your spouse.
Regardless of the cooperative negotiation methodology you use to get a divorce, understand this:
It is you and your spouse who have the power to negotiate, and ultimately decide, who gets the house in your divorce.
Litigation:
Unlike cooperative negotiation where you and your spouse would work together either directly, or with the help of your chosen representatives, to decide who gets the house, in a litigated divorce, a judge will decide.
And since judges are people, with their own unique personalities and perspectives, in a litigated divorce, who gets the house is anyone’s guess!
They may assign it to one of you, or they may force you to sell it and divide the proceeds.
Naturally as a mediator, I’m a big fan of cooperative negotiation. So that in a divorce, who gets the house is decided by the spouses. If you and your soon-to-be-ex can sit in a room like adults and work out who gets the house between you, in my opinion, that’s always best.
But if you can’t, it will be decided eventually.
By someone other than the two of you.
3.) Do you have children?
When thinking about who gets the house in a divorce with children, for many of the parents I work with, the goal of minimizing disruption to their children is paramount.
So, if you’ve got kids, you may want to explore questions such as:
- Will there be a primary caregiver? Or will you each have equal parenting time?
- Does the location of your home determine the children’s home school district?
- Have the kids expressed an interest in staying in the home?
- How close are they to graduating high school?
- Do they have lots of friends in the neighborhood?
Which, depending on the answers, may also factor into your negotiations, and help you decide who keeps the house.
4.) Is the house Separate Property or Marital Property?
In question #1, we talked a bit about marital (aka community) property, and the two concepts used to divide it in a divorce.
But what happens if the house isn’t marital, and is instead separate property?
In cases like these, the property typically goes to the individual in whose name it is titled. This can be quite common in a divorce after a short marriage, when one spouse owns a home prior to getting married. The property stays with them because they owned it prior to marriage.
It’s important to note that just because only one spouse’s name is on the deed, it doesn’t automatically make it their separate property.
If a home was purchased by a couple while married, unless the spouses otherwise agreed in writing that the house was the separate property of the purchasing spouse, it is most likely a marital asset.
The concepts of marital versus separate property are complex ones!
If you have any questions, it’s important you consult a qualified professional to understand how these concepts would apply in your unique situation.
5.) How long do you think you would stay in the home?
So far, we’ve been discussing some of the more “tactical” issues that impact how a house is divided in a divorce.
But now we’re going to turn our attention to the more abstract ones.
And the first one is: how long do you think you would stay in the home?
Let’s say you have a junior in high school and you want to stay in the house until they graduate. In this case, the short time horizon may not make sense to try and keep the house in your divorce.
Your spouse may ask you to give up (in your opinion) too much in order to stay just two more years. And who knows what the housing market is going to look like when you go to sell it. So, you may be even worse off than you thought.
But what if this was your dream house? And you see yourself staying in it for as long as you’re able?
Well in that case, you may be willing to trade something equally valuable in your divorce negotiations, such as your share of the retirement accounts, to do so. And because the time horizon is quite long, you’re betting on (and hoping) that the housing market will continue to rise, and you’ll be able to save for retirement over the coming years.
Since answering this question requires some serious thought, really give it the time it deserves as your time horizon can have a major impact on what happens to a house in a divorce.
6.) Which of you wants it?
As you’ve been learning, deciding who gets the house in a divorce can be a pretty complicated matter!
But there is one simple question you and your spouse can ask which may make the decision easier on the two of you and that is…
Which of you wants it?
In addition to the tactical issues which impact how you split a house in a divorce, there are also emotional issues.
Because for some people, a house is more than just an asset.
It’s the place where their children took their first steps. Or said their first words. It’s memories of countless family dinners. Or happy holidays celebrated.
While for others, it’s security.
Divorce can bring with it tremendous upheaval. So, having a place that’s familiar, and they can call their own, can provide some people great comfort in tumultuous times.
Given that you’re reading an article about who gets the house in a divorce, something tells me you may be inclined to want to keep it.
But, in my experience as a mediator, I find that just as many spouses don’t want to keep the home!
Because for some of the spouses I work with, keeping the home feels like a constant reminder of a failed marriage, and so they are more than happy to let their soon-to-be-ex-spouse take it.
While others feel they simply can't handle the upkeep, like maintaining the yard or clearing the snow, or simply don't want the expenses that come with the home.
If in your situation, you want to keep it, and your spouse has no interest, it may be as simple as that!
7.) The wildcard: How hot or cold is the real estate market?
Up until now, the questions I’ve asked you to consider are either: ones that are already determined for you - like the property division methodology you must use in your divorce. Or things you can decide - like how long you think you would stay in the home.
So, for the final question, consider something which is completely out of anyone’s control and that is: how hot or cold is the real estate market where you live?
Because no matter what the answer is, it will play a role in determining the fate of your house in your divorce.
First let’s take a look at a hot real estate market.
In my experience, a hot real estate market can work against you and your spouse in two ways.
The first issue when the market is hot is that the value of your home will most likely be elevated.
Meaning if the two of you agree it’s required, you’ll have to buy your spouse out for top dollar. Or give up quite a bit in your divorce settlement to keep it. This may make the home out of reach for you.
Second, your spouse now needs to find a new place to live.
Not only will they be dealing with elevated housing prices, but also competing with lots of other buyers. This may make buying a home difficult for them.
And if children are involved? A hot real estate market can also adversely impact them!
Given the elevated housing prices, and lack of inventory, your now ex-spouse may have to purchase a smaller home, or one that’s further away, in order to be able to afford a place to live.
This can put a strain on parenting time as they might not have enough room for the kids to comfortably stay overnight, or their house may now be outside of the children’s home school district. Making getting them to school in the morning difficult.
OK, so what about a cool housing market? Is that any better?
Certainly, lower housing prices can make buying another home more affordable.
But, in my experience, cool housing markets have two undesirable characteristics: a lack of inventory and high interest rates.
Is your ex-spouse going to want to settle for a less desirable house, and pay higher interest rates for the privilege of doing so?
Highly unlikely.
Which makes deciding who gets the house in a divorce equally challenging in a cool housing market. Because in my experience, in these situations, both spouses express a strong desire to remain in the marital home as it’s a good value. And a place they know and (hopefully) love.
If you’re lucky enough to be in a housing market where inventory is decent, prices are stable, and interest rates are reasonable, that may make the decision of who gets the house easier.
But since those conditions are pretty rare these days, unless your spouse plans on renting, or relocating to a lower cost-of-living state, I’m afraid your local real estate market might not make deciding who gets the house in your divorce any easier.
And that is why I call the housing market the wildcard of deciding who gets the house in a divorce!
In a divorce, who gets the house is not cut and dry.
There’s a lot to think about, isn’t there?
But the main take away from this post is that if you choose to negotiate the terms of your divorce, you and your spouse will have full control over this important decision!
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