It’s not just a house, it’s a home. Your kids have grown up there. You’ve put time, money, and hard work into repairs and improvements. It may even seem like the one, solid thing that remains the same while the rest of the world is falling apart. If you stayed in your family home, your children could keep going to the same schools, in familiar surroundings, with their old friends.
But it might also be the most valuable financial asset you and your spouse own together. Often divorce leaves both spouses in a worse situation financially, and keeping the house just is not an option. Or, you might feel that there are so many memories that you don’t want to stay, even after your ex moves out.
Is the house considered community property?
The property, income, and debt you acquire while you are married is generally considered community property in California and will be split 50/50. You’ll want to talk to your attorney about what is community property, separate property, or commingled property. When couples combine assets they brought into the marriage to purchase shared property, such as a house or a car, the property division might not be so straightforward.
Can you afford to keep the house?
Unfortunately, divorce can wreak havoc on your finances. When you no longer split your expenses with someone, or suddenly find yourself out in the workforce after being a stay-at-home parent, your new financial situation can be very difficult to adjust to.
If you decide keep the home, you’ll probably have to take over the whole mortgage, without any help from your ex. Even if you already own the home outright, you might not have enough income to pay for homeowners insurance, utilities, maintenance, and property taxes (in addition to all your other expenses) and it might make more sense to sell.
Do we have to sell the house?
There are three main options for what to do with your home in a divorce:
- Sell the house and divide the proceeds,
- Buy out the house from your spouse, or
- Co-own the house together and sell at a later time.
Selling the house
The option to sell the house is pretty straightforward (although real estate transactions are always complicated). Typically, a professional appraiser will assess the fair market value of the home, and the costs of the transaction will be covered by the sale. Dividing the proceeds of the home will depend on whether the home was simply community property, or if there were other considerations.
Buy out from the other spouse
One spouse might prefer to keep the house, because they are emotionally attached to it, or for the sake of the children. If that spouse has sufficient income, they can re-finance the house and get a new mortgage, and the other spouse will no longer be responsible for paying the mortgage. In that situation, one spouse might use his or her separate property to buy out the other, or the community property might be divided so that the total assets and debt (including the mortgage) are redistributed fairly.
Co-owning the home
Sometimes, for economic or other practical reasons, spouses may decide to co-own the house together. The couple might decide on a specific deadline, make the sale contingent on a certain event, or they might just leave it open-ended. Like any of the other options described above, there can be serious tax implications, so it makes sense to talk to your financial advisor as well as an experienced divorce attorney.
Get help from an attorney you trust
In addition to all the other issues involved in a divorce, deciding what to do with the family home is complicated and emotional. Fortunately, a trustworthy, experienced divorce attorney can make the experience a little easier on you. At Kendall Gkikas & Mitchell, LLP, we have over 20 years of experience handling Southern California divorces. We’ll work with you to help you navigate the difficult issues. If you have questions about your divorce and what to do with the family home, call 909-482-1422 or email info@parents4children.com to set up your initial consultation today.
