Who Gets the House in a Divorce?

When a marriage ends, one of the top concerns for many couples is how to split the assets they’ve accumulated during the marriage. And in most cases, the most valuable asset a couple owns is marital property –– their home.

But who gets the house in a divorce, and who decides? 

As with most things involving legal matters, the answer to that question can depend on several factors—including where you live, the laws of your state, and whether one or both of you prefer to keep the home. Breaking down these different factors can give you the clarity you need to move forward.

You or Your Spouse: Who Gets the House? 

A house represents a significant financial investment, so it’s wise for both spouses to understand the myriad factors that can determine who has the right to retain the home or its value. In most cases, both parties have some stake in home ownership—but that isn’t always true. And even when it is true, it doesn’t always mean that the home’s value will be divided 50/50 during a divorce.

In many situations, homes are purchased at some point during a marriage with money earned by one or both spouses during the same time. In these situations, it’s safe to assume that both parties hold ownership and as such are each entitled to 50% of the home’s equity value.¹ 

However, it’s important to understand how your specific state’s laws may affect the division of marital assets. For example, Texas divorce laws can vary from say Missouri divorce or California divorce laws. 

State Laws and the Division of Marital Assets 

Marriages are sanctioned and dissolved at the state level, but not every state takes the same view on how marital assets should be divided. The laws where you’re filing for divorce can impact and complicate the process of deciding who will be able to keep the house. 

Your state will follow one of two law systems for marital asset division: community property law, or the law of equitable distribution. Understanding which law applies in your state and learning the difference between these two law systems can provide insight into how you’ll be able to divide up your assets. 

Community Property 

Community property state laws simplify the process of deciding who gets the house in a divorce. States that observe community property law distinguish between two kinds of marital assets:²

• Community property – Under community property law, shared or community property includes any assets or debts that were acquired by either spouse during the marriage period. If a divorce case takes place in a community property state, this means the divorcing couple has an equal share of the property. 
• Separate property – In community property states, married people may also hold assets in their own name, separate from their spouse. Called separate property, these assets can include investments, debts, and property purchased by one partner prior to the marriage. Additionally, if one partner inherits or is gifted property during the marriage, it’s considered separate property.

In some situations, both spouses may be titled property owners. This may be because the property was purchased jointly at some point during the marriage, or because the non-purchasing spouse was added to the title at some point (such as via prenuptial agreement). In this scenario, each partner is legally entitled to half of the home’s value. 

However, if your spouse bought the house on their own prior to your marriage, you don’t have any claim of ownership and are not entitled to a share of the property value.

Community law is observed in nine states. They include:²

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

Law of Equitable Distribution

In all 41 other states, marital assets are divided according to a system known as equitable distribution. In these states, a couple’s assets and debts are separated equitably among both spouses in a divorce case.³

Notice that we said assets are divided equitably, not equally. The distinction is crucial, because it means that you could walk away with more or less than exactly half of what your marital assets are worth. Instead, the court opts for fairness over equality when it divides assets and determines in a divorce process who gets the house.

In making its determination, the court may consider factors such as: 

• The length of your marriage
• The age and health of you and your spouse
• Alimony sums, if awarded 
• Your individual financial health at the beginning and end of the marriage 

In some cases, the court may decide that equity and equality are the same thing and divide assets 50/50, even in equitable distribution states. Keep in mind that couples divorcing in equitable distribution states are encouraged to work out an agreement about their assets before involving the court.

Truehold, Where You Hold the Power 

Regardless of where you live, many people find that selling a house during divorce is often the easiest way to split up. Fortunately, there’s a solution for divorcing people who want to sell quickly and divvy up the profits—even if one spouse prefers to stay. The solution is Truehold.

At Truehold, we’re committed to helping homeowners access their equity at a competitive price, whether you need it to pay off debts, finance an education, or go your separate ways. Then, we give you the option to continue living at home as a renter through a sell and stay transaction.

Interested in learning more about how Truehold’s sell and stay transaction can help you harness your home’s value? Get started today.

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Sources: 

1. Survive Divorce. Who Gets the House in a Divorce. https://www.survivedivorce.com/who-gets-house-divorce 

2. Business Insider. In 9 US states, a divorce could mean losing half of everything you own. https://www.businessinsider.com/personal-finance/which-states-are-community-property-states-in-divorce 

3. CDH Law. What Does It Mean to Be an Equitable Distribution State? https://lawcdh.com/2020/01/07/what-does-it-mean-to-be-an-equitable-distribution-state/