Should You Ask for the House in Divorce?

One assumption many people have is that they should request the family home in a divorce. Often, the house is a couple’s largest asset, and many people fear moving. However, requesting the home isn’t always the right move for our clients. At Plyler, Long & Corigliano, LLP, our Monroe divorce lawyers will discuss your goals and help determine which assets to request.

Marital Property Overview

Section 50-20(c) of the North Carolina General Statutes calls for an “equal” division of marital property upon divorce, unless an equal division would be unfair. In this way, North Carolina is an equitable distribution state.

State law defines marital property as property obtained while married. It doesn’t matter whose name is on the deed or who paid for the mortgage. If you purchased the home while married, it’s likely marital property and subject to division.

Equal distribution is not always 50/50—but it often is. All marital assets get pooled and then you divide them. You can speak up and request certain assets. In fact, you can create a settlement agreement where you decide who gets what.

Many of our clients confront the question: do I want the home? Of course, not everyone has the option of staying put Let’s say your marital property is divided 50/50. Consequently, your ex has a right to either half of the equity in the house or an offsetting amount of other marital assets. If there are no other assets, or not enough, you could be forced to sell the house and divide the proceeds.

The question of whether to ask for the house arises most frequently when a couple has enough offsetting assets that one spouse can get the house. They don’t need to sell it, and they don’t need to buy out their ex’s share of the equity. However, there may be a need to refinance the home to remove the spouse from the mortgage or the need to assume the mortgage. The party choosing to keep the marital residence, needs to be certain they have the ability to refinance and maintain the mortgage, insurance and property taxes on the home.

Advantages to Keeping the Home

There are some situations where asking for the home makes sense:

  • You have small children and don’t want to uproot them. Staying in the house for a few years can help bring stability during a turbulent time.
  • You don’t want to leave the city and the housing market is red hot. It might be hard to find another home nearby at a reasonable price.
  • You are receiving government benefits which are means tested. Typically, your home isn’t counted as an asset for purposes of the means test. But if you sell it, then you might be disqualified from future benefits.

These are situations where it’s sensible to keep the house. Nonetheless, discuss all options with your lawyer.

Disadvantages of Getting the Home

Staying in your home isn’t the best choice for everyone. For example:

  • The house requires too much maintenance, which you don’t want to bother with. As we age, people can commit less time to home maintenance, yard work, and other repairs. It might be better to request other assets which don’t require upkeep.
  • The house requires major repairs. Is the roof leaking? You might not want to be on the hook for a $30,000 new roof. You should consider the real value of the house before requesting it. Believe it or not, real estate can decline in value if you aren’t prepared to make some major investments.
  • You can’t afford the taxes. This is another expense you must consider. Property taxes are an annual expense. Also, selling the house usually results in paying capital gains taxes. You should consider the tax consequences of divorce with your attorney.
  • You intend to move. You might be planning to leave the area to live with family or pursue new career opportunities. Few people want to be burdened with a house. Even selling a house can be a hassle you don’t need when trying to establish yourself in a new location.
  • Call Our Divorce Lawyer for Help

    Plyler, Long & Corigliano, LLP, works closely with our clients to think through their options when it comes to marital property. We can use our decades of experience to help our clients hit the ground running after divorce.