Who Gets The House in a Divorce? | Law Office of Julie Fowler, PC, LLO

One of the larger assets that couples have when they decide to divorce is often the house.  Not only is the equity value, but there may be sentimental value as well.  A parent that wants custody may want to retain the home to have some consistency for the children during this time of change.  They may wonder how to afford the mortgage payment, upkeep, and utilities on one income.  Another party may want to sell the house and divide the profits so that each party has liquid funds to start a new life following the divorce.  Who gets the house in a divorce can be one of the main driving forces for disputes.

Who Gets The House in a Divorce?

If you are in the beginning stages of divorce, you might be wondering who will get the house. There are several factors that often come into play for the final decision.

What is Equity and Real Property?

When awarding a house in a divorce, there are two basic terms everyone needs to know.  One is real property.  Real property means land, property, and buildings.  You may hear the attorneys and judge talking about who should be awarded the real property in your case.  They are talking about the real estate you own, which for many people means their house.

Equity is another term you will often hear.  When one party is awarded the house in a divorce, then the other party is awarded their share of the equity in the home.  Equity is generally the market value of the home minus what is due on the mortgage.  Thus, if a home is worth $300,000 and has $100,000 due on the mortgage, the equity of the home would generally be $200,000.

If each party was awarded a 50% share of this equity, then each party would be awarded a value of $100,000. Thus, the person who is awarded the home would get the home as their share of the $200,000 but would need to find a way to pay the other party for their $100,000 share in the overall financial settlement in the divorce.

Is the Home Marital Property, Non-Marital Property, or Some of Both?

A spouse is only awarded a share of equity in the house if the house is marital property.  To determine if the home is marital property, the first question to ask is when was the home purchased.  If the home was purchased during the marriage and used as their primary home, then the home is usually 100% marital property, no matter which spouse’s name is actually on the title.  Thus, all equity in the home would be divided between the spouses.  If the home was purchased during the marriage, then the Court is likely going to look at other factors to determine who should be awarded the home as this factor is otherwise equal between the parties.

If the home was purchased prior to the marriage, then the Court may be more likely to award the prior homeowner the home.  Even if the home was purchased prior to the marriage, the home could be part of marital property.  For example, if there was a mortgage being paid during the marriage, then the home is generally part of marital property and part pre-marital property, no matter which spouse’s name is actually on the title.

There are a number of methods used to determine what part of the equity in the home is pre-marital and what part is marital. 

Only the marital part of the equity is divided in the divorce.  To determine what part of the property is marital, the method often involves looking at the number of months the home was owned prior to the marriage compared to how many months the home was owned during the marriage and coming up with a percentage as marital.

The spouse that owned the home prior to the marriage generally has a greater claim to being awarded the home, but the Court can still award the home to the other spouse, especially if part of the equity in the home is marital and if the overall factors support that decision.

Even if the home was purchased prior to the marriage and paid in full, there may be some marital equity in the home to divide, especially if there have been major updates and remodels during the marriage that increased the value of the home during the marriage. In community property states, things can be even more complicated.  Nebraska is not a community property state so these issues won’t be addressed here.

Considerations when Determining Who Gets the House

If you are in the middle of a divorce and you are not sure whether to fight for the home or not, there are several questions that you should consider. First and foremost, it is important to make sure that you will be able to afford the house on your own. It is important to go over your finances and make sure that keeping the house is something that you can afford and that you really want.

Figuring in reliance on alimony and child support can be risky when determining whether you can afford the home on your own.  Until the final order is entered, there is no guarantee the Court will award alimony or the amount of alimony or child support that will be awarded.  Also, if the other party doesn’t pay the alimony or child support on time or at all, you could be left with a mortgage you can’t afford.

Additionally, it is important to think about your children.

If you are going to seek custody and will play a major role in raising the children, keeping the house might be the best option. However, if your spouse is going to be the one with the children more of the time, it might be a good idea to consider letting them keep the house and requesting money in return for your share of the equity.

Further, especially if you have a lot of debt, not a lot in liquid assets or the home is really too much for either of you to afford on one income, it may make sense to agree to sell the home and divide the profits.  Walking away without a home but with debts paid off and some money for a new down payment can be one of the best ways to start a new life after the divorce is finalized.

Making the Decision

In many cases, the spouses agree on their own who gets the house and how the equity is to be divided.  This is often done through the assistance of the attorneys to make sure the agreement is fair for both spouses.  The spouses can take into consideration what each spouse can realistically afford and the intrinsic sentimental value the home may have for one spouse or their children.  If you cannot come to an agreement, a judge can make the decision for you.

If you cannot come to an agreement and decide to let the court decide, you are leaving the decision to a complete stranger. Additionally, the decision made by the judge may not take into account any nuances of the marriage and the decision will more likely be made simply on dollars and cents. Divorce is complicated and when there are home and children involved it can get messy. It is typically best to hire a divorce attorney to help you through the process, even if you and your spouse are separating on relatively peaceable terms.

Law Office of Julie Fowler, PC, LLO | Divorce Lawyers Omaha

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