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Should I Fight to Keep the House, and Can I Even Afford it?

Should I Fight to Keep the House, and Can I Even Afford it?
Hendershot, Cannon & Hisey, P.C.

Divorce is a major life event that comes with a plethora of possibilities. As spouses work to unravel all that’s become intertwined during a marriage, looking toward the future is something you simply can’t disregard, whether that’s in terms of child custody, spousal support, or property division and the possession of a family home.

Thinking Ahead: Your Future After Divorce

Texas family courts encourage non-litigated resolutions to divorce cases, devising a divorce agreement that works for both parties will require some collaboration with a soon-to-be-ex. That means you and your former spouse will need to strike a compromise over a number of issues, and that you’ll need to “pick your battles” wisely, so to speak.

For most people considering or initiating a divorce, it’s easy to get lost in the “bigger” types of issues that may arise as a case unfolds (property division chief among them). However, tunnel vision on certain issues, or overzealousness about “winning,” can hinder your ability to objectively evaluate how outcomes you think you want will actually impact your life after divorce. It’s why setting realistic expectations when preparing for divorce is so important.

In short, it’s worth it to “zoom-out” and take a broader look at how certain resolutions will affect your unique situation, and your future – especially when it concerns the family house.

A House, A Home: Is Your Home Divisible in Divorce?

The family home can be much more than an investment or piece of equity; it’s often imbued with memories and strong sentiments. For these reasons, it’s not abnormal to want to keep your home, particularly when you’ve established roots, raised children, and feel it provides a sense of comfort and calm amid what can be an emotionally turbulent time.

Though family homes are emotional treasures, they are also often the largest asset owned by spouses, as well as a major point of contention in divorce.

Before you think about whether keeping the family home is right for you, you’ll need to first determine whether it’s divisible in divorce. Although property division is part of many divorces, that doesn’t mean everything is up for grabs, or that the entirety of big-ticket items are jointly owned. As we’ve discussed on our blog, figuring out who owns what may require tracing the ownership of assets.

When it comes to the family home, for example, there are a number of property division considerations to take into account, including:

  • Whether the home is community property (subject to division) or separate property (not divisible in divorce);
  • When and how title in the home came to be in your name or your spouse’s name. A purchase by one spouse prior to marriage could mean the home is separate property;
  • If the home was owned by one spouse prior to marriage, the date at which it was deeded into the name of both spouses;
  • Whether the home was given to one spouse through an inheritance, which could make it separate property.
  • How and to what degree assets have been commingled. If the non-homeowner spouse contributed to the upgrade of the home, for example, they could have a potential reimbursement claim.
  • Was there a prenuptial agreement with terms about the division of a family home, or a post-nuptial agreement signed by both spouses after the marriage? If so, the terms of that agreement would supersede Texas laws regarding asset division in divorce.

Is it Worth Fighting For? Understanding Your Stake in the Marital Home.

With these considerations in mind, you can gain a better understanding of who owns what, and, if applicable, the percentage of each spouse’s share. Here are a few examples to illustrate how this can impact your decision to fight for the home:

  • If you and your spouse purchased the home together during the course of a marriage, it’s considered community property under Texas law. Your decision to keep it or to walk away still isn’t easy, however. You’ll need to consider whether a buyout or trade-off would actually end up costing you more than simply selling and splitting the profits (especially in terms of what the current real estate market is like in your area), or negotiating a settlement for the other spouse to keep the home.
  • If the once-separate property home is subject to community property interests, meaning one spouse is entitled to a community property share (via commingled assets) or a spouse has right to a reimbursement claim through contributions, then you’ll need to carefully consider what your stake in the home is. If you have a fractional share or far less than “half,” you’ll need to keep in mind that it may cost you (either in the form of a buyout, a negotiated award of other property, or some other resolution) to obtain full ownership of the home.

Other Considerations When You’re Thinking About Keeping the House in Divorce

Whether or not your home is clear-cut community property or some amalgamation of community and separate property interest is a very important factor in divorce and property division. However, it is not the only consideration to keep in mind when determining whether fighting for the family home is the right decision for you.

  • What it will “cost” you to buy out your spouse’s community property share of the home, either as a lump sum payment, a disproportionate share of assets, or less / more spousal support.
  • Valuation of your home, its equity, any special income earned through ownership of the real property (i.e. oil and gas interests or farms and ranches), and its potential for future growth as an investment.
  • Whether you intend to stay and live in the family home as a primary residence, or use it as a rental or vacation property.
  • Whether you’ll be able to qualify for a refinance on your own.
  • Applicable taxes and liabilities that may apply.
  • Whether the home means that much to you and / or your children, and whether it’s financially more prudent to keep the home or relocate (even if it’s to a more affordable home in the same town or neighborhood).

Of course, the biggest consideration is one of practicality: how much is it going to cost you on your own. You’ll need to think about the mortgage, property taxes, insurance premiums, utilities, upkeep, and other home-related expenses, and whether you have (and will continue to have) the means to meet those obligations – especially if your dual-income home turns into one supported by a single income.

Compassionate Counsel, Experienced Legal Advice

Led by a Board Certified Family Law Specialist, our divorce and family law team is well aware of the many conflicting emotional and financial considerations in Texas divorces. As such, we take the time to speak personally with our clients, understand their situations and goals, and provide the experienced legal counsel they need to make informed decisions – both in their divorce cases and for their futures.

If you have questions about divorce, property division, or a potential case you’re ready to start, Hendershot, Cannon & Hisey, P.C. is here to help. Call (713) 909-7323 or contact us online to speak with a lawyer.