From a property perspective, divorce cases come in all shapes and sizes – from low- or no-asset divorces to those involving high net worth, complex financial holdings, and unique assets. Though the range is vast, real estate such as the family home is often one of the most significant, if the not the largest and most valuable, assets owned by divorcing spouses. As a result, it typically becomes a focal point in matters of property division.
Understanding if Your Family Home is Divisible in Divorce
Because Texas is a community property state when it comes the division of assets and debts, a family home may be classified in one of several ways:
- Community Property – A family home may be community property if it was purchased by both spouses during the course of their marriage. Under the Texas family code, this would mean each spouse has a community property interest in the home for the purposes of property division, and that the home must be considered in the division of the marital estate.
- Separate Property – A home may be considered separate property if it was obtained through a gift or inheritance or was purchased prior to marriage. Even a separate property home may have community property claims on it, such as if the home is refinanced into both parties’ names during the marriage, or if community property was used to make significant improvements to the home.
A claim to reimbursement may arise when one spouse owned a home prior to marriage, and the home was paid for, maintained, or improved in part by community income (including the income of either or both spouses during the marriage). The following situations may affect the characterization of a family home as community/separate property or raise a claim to reimbursement:
- Adding a spouse to the deed – Deeding a separate property home into the names of both spouses once they have been married can complicate things. Adding a spouse to the deed of a separate property home may be viewed by Texas courts as a “gift.” As such, the home may then be considered jointly owned separate property.
- Mortgage payments – There are many cases in which one spouse moves into a home their partner purchased before marriage and helps pay the mortgage on that separate property home with their own income and assets. In such a situation, the non-owning spouse may have a claim to reimbursement based on the increased value of the home based on those contributions.
- Contributions and upkeep – Normally Texas spouses cannot receive a reimbursement for routine living expenses and maintenance, but there may be a claim to reimbursement for significant improvements if the spouse seeking the reimbursement can prove how much the improvement increased the value of the home.
When It’s Time to Divide
Divorcing and divorced spouses don’t typically choose to live together after parting ways, and they can’t cut a house in half so each can do as they please with their share. As such, there’s often the need to address the fate of the family home when negotiating property division settlements.
Common resolution options may include:
- Selling the home and splitting the proceeds between the two spouses, based on whatever their calculated proportionate share may be.
- Allowing one spouse to remain in the home for a specified period of time, such as when there are minor children, with an agreement or court order to sell by a certain date and split any proceeds at that time.
- A spouse buying out the other’s marital property share in the home through a lump-sum payment, often accomplished with a home equity loan when the spouse keeping the house refinances it into that spouse’s sole name.
- A spouse awarding other assets equivalent to the other spouse’s community property share of the home in lieu of a buyout. If the parties agree to it, this may even include assets the receiving spouse may not have otherwise been entitled to under community property laws.
- Adjusting spousal support payments in order to compensate for the value or share of the family home held by one spouse.
- Continuing to own the home jointly, either by living together (which is understandably rare), having one spouse remain in the home and paying the other rent, or using the home as a rental investment property.
Proven Divorce Attorneys Serving Collin & Denton Counties
Dividing a home in divorce can be a challenging matter, making it critical that divorcing spouses work with attorneys capable of protecting their rights and interests. Whatever the issues involved in dividing or selling a home, you want to be sure you do your due diligence, and have the professional advice needed to make informed decisions.
At Coker, Robb & Cannon, Family Lawyers, our firm is comprised of three Family Law Specialists Board Certified by the Texas Board of Legal Specialization (Duane L. Coker, Kelly K. E. Robb, and Jacqueline Cannon) and a team of talented attorneys who draw from over 95 years of collective experience when protecting clients’ rights and interests during a range of divorce and family law cases. If you would like to learn more about us, your case and options, and how we can be of assistance anywhere in Collin County, Denton County, or the surrounding areas, we’re here to help.
Call (940) 293-2313 or contact us online to speak with a member of our team.