The Family Home in Divorce

Divorce often requires division of marital assets, and at times, the sale of marital assets. Accordingly, one of the most contentious assets in property division is the family home. For many parties, the family home is a sizeable asset with sentimental value.

Ownership

Is the house community property or separate property?

Community Property

Community property is property that belongs to both spouses. Under California law, there is a presumption that an asset is community property if it was bought during the marriage by a spouse while domiciled in California. So, if the house was bought during the course of the marriage, then it is presumed to be community property. Accordingly, each spouse has an interest in the home and it is subject to property division in divorce.

However, it may not be so easy to tell at first glance who owns the house. There may be instances when the house is in only one spouse’s name but was bought with community funds during the marriage.

Separate Property

There is a presumption that an asset is the separate property of a spouse if the property was bought before the marriage. Thus, a house that was bought before marriage will be considered as separate property. As a general rule, separate property is not subject to property division and remains the sole property of the spouse who originally bought it.

In some instances, however, the separate property may be converted into community property if the other spouse contributed to the mortgage payments or improvements of the house. In this case, the spouse who contributed will be entitled to an interest in the house and the house may be subject to division.

Property Division

Now that we’ve settled the matter of ownership, let us discuss the options available to parties.

Sale of the House

The parties can opt to sell the house and then divide the proceeds. This is the most straightforward option available to parties. This option is often suggested in case the parties cannot afford to maintain the house, or if neither of them has the financial means to buy out the share of the other spouse.

Share Buy-Out

A spouse who has the financial capability can opt to buy out the share of the other spouse in the property. This option is more complicated than the first option, as it involves many implications such as tax consequences and mortgage refinancing.

Deferred Sale of Home

The spouses can also opt to postpone the sale of their home. Either one of the parties can petition the court for a deferred sale of home order. If the court grants it, the use and possession of the house will temporarily be awarded to the custodial parent. The purpose of this provision is really to minimize the adverse effect of the divorce on the children. Losing a family home is often a traumatizing experience for the children involved.

The following factors are considered by the court in a deferred sale of home order:

• The length of time the child has resided in the home
• The child’s placement or grade in school
• The accessibility and convenience of the home to the child’s school and other services or facilities used by and available to the child including child care.
• Whether the home has been adapted or modified to accommodate any physical disabilities of a child or a resident parent in a manner that a change of residence may adversely affect the ability of the resident parent to meet the needs of the child
• The emotional detriment to the child associated with a change in residence
• The extent to which the location of the home permits the resident parent to continue employment.
• The financial ability of each parent to obtain suitable housing.
• The tax consequences to the parents
• The economic detriment to the non-resident parent in the event of a deferred sale of home order.
• Any other factors the court deems just and equitable.