For many people going through a divorce, the family home is one of the most important assets to address. That is particularly true in Los Angeles, where real estate may represent a substantial portion of a family's net worth. But the house is rarely just a financial asset. It may be where your children grew up, the place you expected to live for years, or simply one more part of your life that you are not ready to see change.
So it is understandable that one of the first questions people ask during divorce is: Who gets the house?
The answer depends on much more than who wants it more. Before deciding what should happen to a home, you may need to determine whether it is community property, separate property, or some combination of the two; identify any reimbursement or ownership claims; determine its value; and evaluate whether either spouse can realistically afford to keep it or whether it makes more sense to sell.
Who Gets the House in a California Divorce?
There is no rule that the wife gets the house, the husband gets the house, or the parent with more custody automatically gets the house.
Instead, the first question is usually what interest each spouse has in the property.
California is a community property state. Generally, property acquired during the marriage with community funds is community property, while property owned before marriage or acquired by gift or inheritance may be separate property.
But real estate can become more complicated because a single home can have both community and separate property interests.
For example, one spouse may have purchased a home before marriage, but community earnings may later have been used to pay down the mortgage. Or one spouse may have contributed separate property toward the down payment on a home purchased during the marriage.
Before deciding who should keep the house, you first need to understand what each person actually owns.
In more complex cases, a forensic accountant may also assist with tracing separate and community property interests and analyzing the financial records. Learn more about how forensic accountants work with divorce attorneys in complex Los Angeles divorces.
Does It Matter Whose Name Is on the House?
Title is important, but you should not assume that the name on the deed necessarily answers every question about who has an interest in the property.
How and when the property was acquired, the source of the funds used to purchase it, how title was taken, what happened during the marriage, and whether any agreements were made between the spouses can all potentially matter.
This is why property characterization can require more than simply pulling the deed and seeing whose name appears on it.
If ownership of the home is disputed, the history of the property and the documents surrounding its purchase, financing, refinancing, and payment should be carefully reviewed.
What If One Spouse Owned the House Before Marriage?
A house owned before marriage may begin as that spouse's separate property. But that does not necessarily mean the analysis ends there.
If community funds were used during the marriage to reduce the principal balance of a mortgage on a separately owned home, the community may acquire an interest in the property and a portion of its appreciation.
This is commonly referred to as a Moore/Marsden calculation, named after two California cases addressing community and separate property interests in real estate.
The calculation can become fact-specific. Among other things, the purchase price, value at the time of marriage, mortgage principal paid during the marriage, value of the property, refinancing, and other transactions involving the home may become relevant.
The important point is that "I owned the house before we got married" does not necessarily mean the other spouse has no financial interest in it.
Likewise, paying expenses associated with a home does not necessarily create the same type of interest in every circumstance. The source of the money and what the payments were used for can matter.
In addition, whether separate property real estate was refinanced during marriage may make a significant difference.
What If Separate Property Was Used to Buy the House?
The reverse situation can also occur.
A home may have been purchased during the marriage, but one spouse may have contributed separate property toward the purchase. For example, a spouse may have used savings accumulated before marriage, proceeds from the sale of separate property, or an inheritance toward the down payment.
Depending on the circumstances, that spouse may have a reimbursement claim or other separate property interest that needs to be considered when the home is divided.
Tracing the source of those funds can therefore be important.
This is one reason financial records from years earlier can become relevant during a divorce. Bank statements, closing documents, escrow records, prior property records, loan documents, and other evidence may help establish where the money used to acquire the property actually came from.
Can One Spouse Keep the House After Divorce?
Yes.
A divorce does not automatically require the family home to be sold.
If the spouses agree, or if the overall property division permits it, one spouse may keep the home and compensate the other spouse for their interest.
This is often referred to as a buyout.
Before a buyout can occur, however, the parties generally need to determine the value of the property and the interests that must be divided. An appraisal may be necessary if the spouses do not agree on value.
The mortgage also needs to be considered. Receiving the house in a divorce does not necessarily remove the other spouse from an existing mortgage or satisfy the lender's requirements. The spouse who wants to keep the home may need to determine whether refinancing, assumption, or another financing arrangement is available.
That makes the practical question different from the legal one.
You may be able to negotiate to keep the house. The next question is whether you can realistically afford to do so.
Do We Have to Sell the House in a Divorce?
Not necessarily.
If neither spouse wants the home, neither can afford to keep it, or a buyout is otherwise impractical, selling the property and dividing the proceeds may be the most straightforward solution.
A sale can also eliminate disputes about the property's value because the market ultimately establishes what a buyer is willing to pay.
But selling is not the only option.
One spouse may buy out the other. The parties may agree to continue owning the property for some period of time. In certain cases involving children, a sale may potentially be deferred. The appropriate solution depends on the property, the finances, the rest of the marital estate, and the family's circumstances.
What If Both Spouses Want the House?
This is where the issue can become more difficult.
Wanting the house does not necessarily mean keeping it is feasible.
The value of each spouse's interest needs to be determined, and the person seeking to retain the home may need sufficient assets or financing to compensate the other spouse while still reaching an appropriate overall division of the marital estate.
Sometimes there are other assets that can be used to offset the value of the house. In other cases, there may not be enough liquidity to accomplish a buyout without refinancing or selling the property.
When both spouses want the home and cannot reach an agreement, the issue may ultimately need to be resolved as part of the larger property division.
Who Gets to Live in the House While the Divorce Is Pending?
Who lives in the house during the divorce is a different question from who ultimately receives the house when property is divided.
Divorces can take time. In the meantime, the spouses may disagree about who should occupy the residence, who should pay the mortgage and other expenses, or how the property should be managed.
California courts can make temporary orders regarding the use and control of property while a divorce is pending under certain circumstances. But a temporary order allowing one spouse to live in the home does not necessarily mean that spouse will ultimately receive the house in the final property division.
Keeping those two issues separate is important: temporary possession is not the same thing as ownership.
Who Pays the Mortgage During a Divorce?
There is not one answer that applies to every case.
The mortgage, property taxes, insurance, utilities, maintenance, and other carrying costs still need to be paid while the divorce is pending, even while the parties are deciding what will ultimately happen to the property.
The spouses may reach an agreement about those expenses, or temporary court orders may address responsibility for certain payments.
How payments made after separation should ultimately be accounted for can raise additional issues. If significant payments are being made toward a jointly owned or disputed property during a divorce, it is worth discussing with your attorney not only who will make the payments now, but how those payments may be treated later. Certain credits and reimbursements may be available.
Does the Parent With the Children Get the House?
Not automatically.
Custody and property division are separate issues, and having more parenting time does not by itself determine ownership of the family home.
Children can, however, be relevant to what happens to the residence.
In some circumstances, parents may agree to postpone the sale of a home so the children can remain there for a period of time. California law also provides for certain deferred-sale-of-home orders involving minor children.
A deferred sale can involve questions about whether maintaining the home is economically feasible, how long the children have lived there, their schooling, and the potential impact of moving, among other considerations.
But the existence of children does not create a general rule that the parent who remains with them automatically keeps the house permanently.
How Is the House Valued in a Divorce?
If one spouse wants to buy out the other's interest, determining the value of the home becomes important.
An appraisal is commonly used to establish fair market value when the parties need an independent opinion. The parties may agree to jointly retain a single appraiser, or each party may obtain their own independent appraisal.
The property's value is only part of the equation. The outstanding mortgage and potentially other liens or obligations affect the equity available for division. If there are disputed separate and community property interests, determining each spouse's ultimate share can require additional analysis.
In some cases, the date of valuation can also become important, particularly in a changing real estate market.
Can I Keep the House, and Should I?
These are two different questions.
The family home can carry enormous emotional significance during a divorce. Wanting to preserve stability, particularly for children, is understandable.
But keeping the house is also a financial decision.
Before fighting to retain it, consider what the house will actually cost after the divorce. That may include the mortgage, property taxes, insurance, repairs, maintenance, utilities, and the cost of buying out your spouse's interest.
Also consider what you may have to give up in the overall property division to keep it.
A house can be a valuable asset, but it is not a liquid one. Keeping substantial equity tied up in real estate may make sense for one person and create financial strain for another.
Good divorce strategy requires looking beyond "Can I get the house?" to "Does keeping the house make sense for my life and finances after the divorce?"
What Documents Should You Gather About the House?
If the family home may become an important issue in your divorce, gathering the property's history can help your attorney understand what needs to be analyzed.
Depending on the circumstances, useful documents may include:
The deed and other title documents
Purchase and closing documents
Mortgage statements
Refinancing documents
Records showing the source of the down payment
Bank statements showing payments related to the property
Records concerning major improvements
Prior appraisals
Property tax and insurance records
Documents concerning any home equity loan or line of credit
Records relating to any separate property used toward the home
For a property owned before marriage, records showing the mortgage balance and value of the home around the date of marriage may also become important.
Do not assume that an old document is irrelevant simply because the house was purchased many years ago. The history of the property may be critical to determining the respective community and separate property interests.
What Happens to the House in a Los Angeles Divorce?
There is no single answer.
The house may be sold and the proceeds divided. One spouse may buy out the other's interest. A sale may be delayed. Or a home that began as one spouse's separate property may remain with that spouse while still requiring analysis of a community interest or other claims.
The right approach depends on much more than who wants the house.
For Los Angeles homeowners, where significant equity and substantial property values may be involved, understanding the characterization, value, financing, and practical consequences of keeping or selling the home can be an important part of the overall divorce strategy.
Emily Rubenstein Law represents clients in complex divorce and property matters throughout Los Angeles County, including Beverly Hills, West Hollywood, Santa Monica, West Los Angeles, Culver City, and surrounding communities.
If your home or other real estate is an important issue in your divorce, contact Emily Rubenstein Law to schedule a consultation and discuss your circumstances.
On your side,
Emily Rubenstein, Esq.
Founding attorney
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