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Divorce is a challenging process, particularly when valuable assets like the family home are involved. The family residence often becomes one of the most significant assets in a divorce, and the question of who gets to keep the house is a common concern. In California, property division during a divorce is governed by both state laws and the circumstances surrounding the marriage. Whether you are looking to keep your home or understanding what needs to be done to navigate this part of your divorce, this blog will provide clarity.
Understanding Property Division in California Divorce
In California, property acquired during a marriage is typically considered community property, meaning it is owned equally by both spouses. This includes everything from savings accounts to the family residence. However, there are exceptions, and how the property is classified can affect the outcome of a divorce. California operates under the community property system, which aims to divide property equally between the spouses.
For divorce cases involving high-value assets like a home, understanding the classification and division of property becomes crucial. If the home was purchased during the marriage with joint funds, the house is considered community property and will be divided between the spouses. On the other hand, if one party had separate property or brought in a down payment using their separate funds, it could influence how the home is divided.
The Family Home as a Key Asset in Divorce
When it comes to the family residence, one of the first things that must be determined is whether the property is considered community property or separate property. The classification of the house largely depends on when the home was purchased and whether one spouse contributed separate funds (like money inherited or a separate savings account) for the down payment. If one spouse brought in separate money to help buy the home, that money could be considered separate property, which may allow them to claim the house or a portion of its value.
In California, even if the property was purchased with both separate and community funds, it doesn’t mean that it will be classified entirely as community property. For example, if one spouse used an inheritance to help purchase the home, they may be entitled to keep that portion of the home’s value. However, the process of determining the value and ownership of the house in such cases can be complicated and may require financial specialists like appraisers or forensic accountants to analyze the situation.
How Separate Property Affects Your Ability to Keep the House
If separate property was used to purchase the house, it doesn’t automatically mean that one spouse gets to keep it. If the house was bought with both separate and community funds, the home might need to be sold, and the proceeds split. However, if the property is deemed to be solely separate property, the spouse who owns it might be able to retain it, although this could be contested.
It’s important to note that if a party can demonstrate that the house is their separate property (due to separate contributions), they may have a stronger case in keeping it. This could involve showing bank records, deposit history, or any other financial proof supporting their claim to the house’s separate status. Keep in mind that the court will also consider factors like the length of the marriage, whether the house was used for the family during the marriage, and the overall financial stability of each spouse.
Strategies for Keeping the Family Home in Divorce
While many divorces result in the sale of the family residence, some couples are able to keep the house. This depends on various factors, including one spouse’s ability to refinance the home on their own, their income, and whether they can afford to buy out the other spouse’s share. In some cases, the court may award the family home to the parent who will have primary custody of the children, allowing the children to remain in a stable environment.
When one spouse wants to keep the home but is unable to afford the mortgage alone, refinancing can be a key strategy. This means that the spouse who wishes to retain the home would need to qualify for a new mortgage on their own, based on their individual credit score, income, and other financial factors. If refinancing isn’t an option, the spouse wishing to keep the home could offer to buy out the other spouse’s interest in the property, which would involve paying them a sum of money to retain sole ownership.
The Role of Mediation in Property Division
Mediation plays an important role in many California divorces, especially when it comes to high-value assets like the family home. If both spouses are in agreement and able to discuss terms, mediation can be an excellent way to reach a solution that works for both parties. A mediator can help facilitate discussions about the home’s future and come to an agreement outside of court, which can be less expensive and less emotionally taxing than litigation.
In some cases, mediation may allow for creative solutions, such as one spouse retaining the home while the other receives a larger share of other assets. For example, one spouse may keep the home while the other spouse gets a greater portion of retirement savings or investments. Mediation can be a good option for couples who want to avoid the cost and stress of a courtroom battle.
What Happens If You Cannot Afford the Home?
If neither party can afford to keep the house on their own, or if one spouse is not interested in keeping it, the house may need to be sold. The proceeds from the sale would be divided between the two spouses based on the community property laws. If there is a mortgage on the property, both parties would also be responsible for the payments until the house is sold and the loan is settled.
If the property is sold, the equity (or value) of the house will be divided. In California, the court typically looks at the total value of the house, including any existing mortgage. The proceeds after the sale and mortgage payments will be split between both spouses based on their respective rights. If one spouse contributed separate property funds toward the purchase or improvements of the home, they may receive a larger share of the proceeds.
How Debt Factors into Property Division
It’s important to remember that property division isn’t just about the assets—it’s also about the debts. If one spouse is awarded the family home, they will also be responsible for the mortgage, property taxes, and other debts associated with the house. This needs to be factored into the overall financial picture during the divorce proceedings.
The allocation of debt can impact the decision of whether one spouse should keep the house or whether it should be sold. If a party is unable to refinance the mortgage on their own, they may not be able to keep the home, especially if they can’t afford the payments without their spouse’s income contribution.
Protecting Your Home in Divorce
If you are hoping to keep the family residence in your divorce, there are several steps you can take to improve your chances. First, consider working with a skilled divorce lawyer who specializes in property division. Second, ensure that you have a clear understanding of the financial implications of keeping the house, including the ability to pay the mortgage on your own. Finally, you may want to consider negotiating a settlement or working through mediation to avoid the more contentious route of litigation.
Navigating divorce and the potential division of your family residence can be a complicated and emotionally charged process. If you are considering divorce or have questions about property division, reach out to The Bledsoe Firm for a free case evaluation. Our experienced family law team can guide you through every step of the process and ensure that your rights are protected.
