What Happens to the House in a Divorce?

Aside from who gets custody of the children, one of the most common questions divorcing couples ask is regarding what happens to the house in a divorce.

One of the following is likely to occur when homeowners divorce:

  • One party buys out the equity of the other and keeps the house.
  • The house is sold and funds are allocated appropriately.
  • The couple decides to maintain joint ownership of the home to use as a rental property or a co-parenting nest.

But what happens if…

The house was purchased by only one party before the marriage? In Ohio, property purchased prior to marriage is often considered separate property. In the case of real estate, however, the other spouse may be entitled to a portion of the home’s equity, if the home increased in value during the marriage. This could happen if either spouse puts in effort or funding that results in the increase in the home value, during the marriage.

It was inherited by or gifted to only one of the parties (before or during the marriage)? Technically, this would be considered separate property. However, if marital funds were used to improve the home or if you take a loan against it during the marriage, there is a component that may no longer be separate.

The home was purchased during the marriage, but the down payment came from inherited funds or premarital funds? The down payment amount remains separate, and the remaining equity may be subject to division.

There is a prenuptial or postnuptial agreement in place addressing the specific property? Assuming that the agreement is enforceable, then the terms of those agreements would govern the outcome.

The home was purchased during the marriage by both parties? This is a marital asset and is subject to equitable division.

In all scenarios, there are certain events and circumstances that may occur during the marriage that may determine what happens to the house in a divorce, such as refinance or taking home equity loans against the home. Scheduling a consultation with a family law attorney who has experience in dividing assets is the best way to get advice on your specific circumstances.