Within a marriage, there are two standard types of property: marital property and separate property.
Marital property is owned equally by both spouses. Separate property is owned by only one person, regardless of their marital status. Defining this property can sometimes be complex, as there are always exceptions and caveats. Generally, you have sole ownership when the property comes from outside the marriage.
Seeing property through these definitions, it can sometimes be unclear how the house is classified. Even if you owned the home before you were married, your spouse has lived in it for some time, and they may therefore have some claim to it. As with any property, the circumstances around the home determine whether it is marital or separate property.
When Did You Acquire the Property?
Traditionally, anything you purchase while you are married is marital property, from a car to a rare collectible. The law regards spouses as family members, and it assumes that anything you purchased was for the overall benefit of that family.
If you bought the home during the marriage, it’s a safe bet that the home is marital property. It will be difficult to argue that the home is yours alone, even when you were the only one who paid for it. You might be able to claim that the home is separate property if your spouse was destructive. If they actively, willfully, and regularly ruined the home, the court may agree with you and allow you to keep it. Circumstances like these are fairly rare, and even when they do happen, it takes a lot of convincing to get the court to side with you.
How Did You Acquire the Property?
Separate property is thought of as property outside the marriage. As discussed above, anything you owned before your marriage can be claimed as separate property. This may apply to the home as well.
Timing is not the only factor that determines separate property. Individual laws can create exceptions, but generally, property gained from outside the marriage can be labeled separate. If you inherit property from a deceased loved one, the law assumes it belongs only to you. Also, if a friend or family member outside of the marriage gives you a gift, that should be yours no matter what.
However, as we will see in the section below, circumstances can change these definitions.
What Was Your Spouse’s Contribution to the Home?
Imagine you are a homeowner, living alone. Eventually, you fall in love, get married, and move your new spouse into the home. Superficially, you can claim the home as separate property. Your spouse’s inclusion, however, can alter the status of the home.
First of all, you must consider that the home is now your spouse’s primary residence. Regardless of how much work or money they put into the house, they can claim partial ownership just by living there. Remember, the law sees your marriage as a family unit, and it doesn’t want your spouse missing out on the fruits of that family. The longer the marriage, the longer your spouse resides in your home, which can give them more entitlement to it.
The issue becomes further complicated when your spouse puts work into the home. This is known as their “contribution” to property. If they helped renovate the home, or if they put direct work into fixing and maintaining the home, they may have some claim to it. The same is true if they helped pay the mortgage. Contribution doesn’t need to be that direct. If your spouse was a stay-at-home parent, they presumably managed the home in your absence. That alone is a form of contribution. If your spouse’s inclusion enhanced the home in any way, they can claim that they contributed to it, and they may be granted partial ownership.
When separate property becomes marital property, either completely or partially, it is called “comingled” property. Untangling the ownership of this property is complicated, and it requires the help of a legal professional.
Splitting Marital Property in a Divorce
Most states use an “equitable property division” model when dividing assets. Essentially, marital property goes to the most deserving spouse. This entitlement comes from their contribution to or exclusive use of that property.
California uses the more traditional “community property division” model. In this model, marital property is also called community property. Only nine states still operate under this system. This model focuses on an equal division of property, or a 50/50 split. Both spouses get an equal share of the community property’s overall value, including any shared debt.
This leaves a problem when granting the home in a divorce. How do you split a solid piece of property among two people?
When dividing a home in a community property state, you have three basic options:
- One Spouse Pays the Other
The court grants the property home to one spouse. After determining the home’s value, the person who receives owes the other half its value.
- One Spouse Makes a Trade
Remember, dollars do not fully represent marital assets. There is value in jewelry, cars, art pieces, and so on. To keep the home, a spouse may trade other physical property for up to half the home’s value.
- You Sell the Property
Sometimes, the easiest thing to do is avoid fighting over property. You could simply sell the home and split the money equally with your spouse.
Going Through the Process
If your divorce goes through the courts, you must make sure you have an attorney who can argue for a reasonable split of assets. To keep the home, you must demonstrate that you are its main contributor, and you deserve it more. In a community property state like California, you must also negotiate a reasonable trade for keeping that home.
You can also avoid court altogether. You have the right to negotiate any divorce decisions with your spouse, and mediation can help. Your mediator, a legal professional, works for both spouses, trying to reach fair conclusions. The spouses agree to these terms, giving them power over the process. Afterward, you submit your agreements to the court, and you can move on amicably.
If you have concerns about losing your home in a divorce, reach out to our firm for help. We can offer you a consultation, so call (949) 565-4158 or contact us online today.