The short answer is the judge will decide. Since each spouse has an equal share of community property, a judge will split all property down the middle. This can be in the form of selling and splitting the proceeds, assigning certain items to each spouse, or by allowing one spouse to “buy out” the other shares of the asset.
Deciding who gets the house is one of the most contentious parts of a divorce. This is because a house can be the family’s most valuable asset, and both spouses are emotionally attached to it. When children are involved, it makes the situation even more complicated.
In most states, including California, there are specific statutory provisions governing what should be done with a home during a divorce proceeding.
California Laws Governing the Division of Property in a Divorce
When deciding what to do with a house during a divorce proceeding, various factors are considered. One of the most significant factors is the categorization of the house as either community property (also referred to as marital property) or separate property.
California is a community property state which means that any assets acquired during the marriage belong equally to both spouses and should be fairly divided by a court of law in case of a divorce.
Separate property are assets generally not included in the division of property in a divorce case. Assets can be categorized as separate depending on how they were initially acquired.
Characteristics of Separate Property
For a home to qualify as separate property, it must meet the following conditions:
- the hom was acquired before the marriage;
- the home in question is categorized as ‘rent, issues or profits’ of property acquired before the marriage;
- the home was a gift from a third party to one spouse and not jointly owned with the other spouse;
- the home in question was inherited or purchased with an inheritance;
- the home was acquired after the couple had separated and lived apart from each other for several months;
- the property was acquired after the entry of a divorce judgment or a legal separation judgment.
For instance, if one spouse bought the house before the marriage, it’s considered separate property. However, if the spouse who moved in contributes monetarily to the mortgage or renovation of the house, it makes the situation more complex.
If both spouses have a stake in the house, California property law classifies the house as community property.
Who Is the Current Owner?
Before deciding who gets the house in a California divorce, it’s essential to understand its current owner. In California, if the house was acquired during the marriage, it’ll be classified under community property; hence both parties will have equal ownership.
However, if one spouse acquired the house through inheritance or as a gift, it belongs to the spouse whose name appears on the title deed. It’s still possible for a house to belong to both spouses even if the title deed indicates one spouse’s name if there’s an existing written or verbal agreement that the house should belong to both spouses.
Does the Titleholder Automatically Get the House in a Divorce?
Determining who’ll keep the house in a divorce process isn’t that simple, even if only one party’s name appears on the title deed.
Most of the time, the family home is purchased during the marriage, and the title is placed in only one party’s name for the following reasons:
- they have a better credit rating than the other spouse;
- they qualify for a mortgage under more favorable interest terms than the other spouse;
- both spouses agree the title should be placed in only one party’s name or plan to change it later to include names of both spouses but fail to do so for whatever reason;
- the title insurance company insists that the title can only be placed in only one party’s name.
The house can’t be categorized as a separate property in such a scenario. Instead, the party unnamed on the title can produce supporting evidence to show that the house is co-owned and rebut the title.
However, if the community property used to purchase the house was properly transmuted to the titleholder as separate property, then it will be challenging to dispute the title.
There are only two options when deciding who gets to keep the house in a divorce proceeding in California. They include:
- both parties can reach an agreement on who gets the house;
- the court can decide the matter on their behalf.
If the house is classified as separate property and the other party has no objection, then the spouse who owned it before the marriage keeps it after the divorce. However, if the other spouse objects to the assumption that the house belongs to the spouse whose name appears on the title deed, the court may require both spouses to agree on who will keep the house after the divorce is finalized.
If there’s no agreement between the two parties, the court may rule that the property should be sold and both parties receive their fair share of the profits. This is only possible if no party has a greater financial stake in the ownership of the house.
If there’s a party with a greater financial stake, the court may allow the party to buy the other spouse out of the property and keep the house after divorce.
On the other hand, if the house is classified as community property, each spouse is entitled to receive 50% of the value. So, for instance, if the house is worth $1,000,000, each spouse would be entitled to $500,000.
Is It Necessary to Sell the House in a Divorce?
Several circumstances dictate if you’ll need to sell the house or not. For example, if divorcing couples disagree on who’ll keep the house, selling the house may be necessary to use the cash as part of the settlement agreement.
Some other factors that may contribute to the selling of the house include:
- if one party is unable to buy out the other party’s interest;
- when both parties can’t agree on the value of the house.
Have Further Questions About the Division of Property in a Divorce? Contract the Castro Law Offices Today
If you are considering filing for divorce, or have begun the process, you likely have important questions regarding the division of property and assessing whether that property is separate or marital in nature. Castro Law Offices is here to help. The firm is comprised of a skilled Marin County divorce lawyer who can help you during this difficult time. Jeremy Castro possesses the experience you need to handle an array of complex divorce matters. Contact his office today so Jeremy can go to work for you.