Who gets to keep the family home is often one of the most contentious issues in a divorce. Not only is the house usually the most valuable asset a married couple owns, but there may also be many memories attached to it. Importantly, while dollar amounts can be easily distributed between spouses, negotiations concerning the marital residence can be much more complex since it cannot be physically divided in two. There are several things that can happen to the family home after divorce and it’s essential to be aware of your options.
How Does California Divide Real Property?
California is a community property state when it comes to dividing property in a divorce. Any property acquired during the marriage is viewed as jointly owned by both spouses — including the family home. Property owned by either spouse before the marriage is generally characterized as separate property, which is not subject to division in divorce. When couples divorce, courts divide marital property equally between them.
Since a house can’t be physically divided in half, the matter can become much more complicated. However, if the parties are amicable, they may agree to an uncontested divorce and decide issues like property division between themselves. Even if a case proceeds to litigation, spouses are free to decide how they will handle the issue of the family home and enter into a settlement agreement at any time outside of court.
What Are Your Options Regarding the Family Home in Divorce?
There may be many reasons a spouse wishes to keep the family home, rather than sell it. For instance, it may make sense for the custodial parent to remain in the home while the children attend school in the district. The family home can also provide consistency for children and offer them a sense of security amid the changes brought about by the divorce. In other cases, a spouse might wish to sell the house for a fresh start and new beginning.
Depending on the facts of their situation, spouses might consider the following options when it comes to the family home in divorce:
- Defer the sale — With a deferred sale, the parties can keep the home until the children graduate from high school or another event occurs, then sell it and divide the proceeds.
- Sell the house immediately — Selling the house immediately upon divorce and dividing the net proceeds can allow the spouses to cut ties and move forward.
- Remain joint owners — By remaining joint owners of the home, the parties have several options. For example, the house can be used as a rental property, or they might agree that one of the parties remains in the home with the children.
- Buy out the other spouse — One spouse may buy out the other’s interest in the home and take full ownership. However, in determining whether this is an affordable option, the party who wishes to buy out the other must also consider the monthly mortgage payment, insurance costs, and property taxes.
California law allows a spouse to be reimbursed for using separate property funds to pay the mortgage on the marital residence after the date of separation and before the divorce judgment is signed. These are commonly referred to as “Epstein credits.” In other words, if one spouse paid the entire mortgage during this time with separate funds, the other would owe them half the amount of payment — unless a court would deem this to be unreasonable.
Similarly, a spouse who had exclusive use and possession of the family home between the date of separation and divorce may be subject to “Watts charges.” This means the spouse who lived in the residence can be ordered to pay the fair rental value to the other spouse for that period of time.
What Happens if Both Spouses Want to Keep the Home After Divorce?
Judges encourage parties to a divorce to reach a settlement without court intervention. But if spouses are unable to resolve their dispute regarding the family home, a judge will determine the outcome based on what is fair to both parties. In such cases, they may order the house to be sold. Before spending the time and money battling in court for the family home, spouses should seriously consider why they want the house and whether it is financially worthwhile to keep it.
Parties to a divorce should be prepared to compromise if they desire to hold onto the marital residence. It’s critical for a party to realize that if they wish to keep the family home after divorce, they may have to concede other property and assets to ensure a fair division of property across the board. An experienced divorce attorney can help to negotiate the best possible outcome.
Contact a Knowledgeable Fresno Divorce Attorney
If you’re facing divorce, it’s vital to have a diligent divorce attorney by your side every step of the way to protect your legal and financial rights. The Law Offices of Rick D. Banks has been committed to guiding clients in Fresno and the surrounding areas through their matrimonial matters and helping them obtain favorable results in their cases for more than two decades. To schedule a no obligation consultation, call (559) 272-8359.