Your home is one of the greatest investments you make, and it has an important role in your life. It is where you rest after a long day of work, and it may have been host to many family gatherings or dinners with friends. Your home may have become even more than that over the past several months, acting as your workplace or your children’s school.
With so much investment into this property, dividing your home could be one of the most stressful aspects if you and your spouse divorce. Who gets the house?
Is your home considered “marital property”?
First, it is important to determine whether the court will consider your home “marital property”—jointly-owned by you and your spouse—or if it is your separate property. Under Tennessee law, the property that you owned before the marriage or property outlined in a prenuptial agreement is solely owned by you and generally will not be divided in a divorce.
Marital property, on the other hand, is anything that you and your spouse acquired during your marriage. Your house may also be included in your marital property if your spouse contributed to payments after your wedding, paid for maintenance or helped with improvements after your wedding.
Tennessee divides property based on what is “equitable.”
While many people believe that their property will be divided equally in a divorce, that isn’t necessarily the case in Tennessee. Instead, the court will divide marital property “equitably,” trying to create a fair solution even if that is not a 50-50 solution.
Your house is marital property. What are your options?
If the court considers your house marital property, you generally have three different options: selling your home, buying out your spouse’s share of the equity and remaining co-owners.
Choosing to sell your home can be a major decision, and depending on the housing market it may lengthen your divorce. However, selling your house and splitting the proceeds may give both you and your spouse a stronger financial foundation after divorce.
Buying out your spouse’s share of your home’s equity, whether by paying for their share outright or by sacrificing other valuable assets to create a fair arrangement, could allow you to move forward as sole owner of the property. It is important to remember that this option often requires you to refinance your home in the process.
Finally, some couples remain co-owners of the house. You may choose this option while you wait for a buyer for the house or while saving money to buy out your spouse’s share of home equity. Some people also choose this option to allow their children a stable household while they are in school.
If you wonder what will happen to your home in divorce, it may help to speak to an attorney about your options. They can help you create a legal strategy that protects your home and your financial health.