Who gets the house?

Whew! We’ve walked through community property, premarital agreements, JAREDs, debts, credit, spousal maintenance, child support, and a few assorted other topics for good measure. Let’s backtrack for a bit and talk about the two biggest assets for most marriages: the house and the family business. We’ll start with the house.

The family home is the ultimate symbol of married life. It is more than a pile of bricks, it is "our" home. Much emotional and psychological importance is place on this simple building, and therefore it frequently becomes battleground in a divorce.

In addition to the emotional connections that people have to their house, there are some very practical reasons for the attachment as well. It is literally the roof over your head, it is a place to raise your children (that bachelor pad is only a one-bedroom), and it is, for many couples, the single most valuable (in monetary terms) asset they have. Think about all the money you have been paying on your house over the years. The equity you have built up may very well be more valuable than anything else you own.

Generally speaking, the house goes to the spouse who is awarded primary custody of the children, but this is by no means a rule. The idea behind this is to have continuity and stability in the children’s lives, as divorce can be such a rough time for them. However, where the children go is always dictated by what the court finds to be "in the best interest of the child," and if staying in the old house isn’t in the kids best interest, then the parent with primary custody won’t get the house.

What if there are no kids involved? Then you are right back to the judge making a just and right equitable division, with the house as the prize in the pot. If there is a mortgage on the house, the court may look to see which spouse can afford the mortgage payments. What you can afford with two incomes is vastly different from what you can afford on your own. Remember earlier when we talked about which spouse is responsible for the debt and what can happen? This is where that comes into play.

Say the judge awards the wife the house, but on her single income, she cannot afford the mortgage payments. She falls behind, and eventually the bank forecloses on the house. Husband was responsible on the house note. Husband and wife are now both in serious trouble.

To avoid situations like this, it is not uncommon for the court to include in its final divorce decree an order that the house must be refinanced by the spouse to whom it was awarded within a set number of months or else it must be sold. The court cannot order that the other spouse’s name be taken off the loan, and many people going through a divorce don’t have the money laying around to qualify by themselves to have their house refinanced. Also, even if the spouse CAN qualify for refinancing, there must be a way to make sure he/she doesn’t drag her feet getting it done. This is why the "refinance or sell by date" is a good solution. If refinancing cannot be acquired in a timely manner, the house must be sold, hopefully at a price high enough that both spouses will be off the hook for the mortgage.