Spouses going through a divorce typically have a lot of assets to divide. When a marital home is part of the assets to be divided, what are the options for keeping the home? One of the most important issues to determine in whether the marital home can be retained by one party, has to do with whether or not the house is joint marital property or separate property.
Among the most substantial matters to work through in a divorce has to do with marital assets. Marital property pertains to any real estate purchase or other substantial acquisition made during the marriage. Money earned during the marriage also counts as marital property. These assets are owned jointly by both spouses; therefore, when a married couple decides to divorce, the value of such assets is divided between both parties.
More often than not, the marital assets involve a home where the couple lived together. When the property is bought jointly by a married couple, the ownership arrangement is clear. In many states, both parties own an equal share of the property; therefore, the value of the property can be split equally. In the easiest scenarios, the house is sold for a fair price, and the proceeds of the sale are split evenly between the sellers. In Pennsylvania, however, the breakdown can be more complicated.
In contrast to states that adhere to the concept of community property, Pennsylvania is considered an equitable distribution state. This means that marital property may or may not be split equally between both parties. The court will consider many factors when determining asset distribution.
Obviously, if the house is solely owned by one spouse, a divorce would not affect that ownership. After the divorce, that owner could legally retain the house.
In cases in which the house is considered marital property, spouses must work out an agreement to split the value of the property.
A realistic alternative might be for one spouse to buy out the interest their former partner has in the property. Similar as splitting the proceeds of a sale for a jointly owned house, one spouse may simply pay their former spouse to buy out their interest in the property. Of course, the exchange would be subject to a fair price, and the transfer of ownership would necessitate new documentation that would name the buying spouse as the sole owner of the property.
In Pennsylvania, a property purchased before a marriage is considered separate property. Separate property, as opposed to joint property, is not subject to being divided up in a divorce. Separate property simply remains the property of the sole owner. However, any enhancement in value that takes place during the marriage may alter the separate property status.
If the non-owner spouse invests in home improvements, such circumstances may affect the sole-ownership arrangement. The courts may decide that such investments substantiate an ownership claim to the increase in the home’s value. This may be enough to threaten the sole ownership claim held by the spouse who entered the marriage with the home as a separate property.
Another situation that may arise is that a property is bequeathed or gifted to one spouse. This arrangement can allow for separate property, even if the property is given to one spouse during the marriage.
If the original purchase of the property took place during the marriage, the home is considered marital property. Even if only one spouse is named on the mortgage, the property is legally owned by both spouses. The laws governing marital property make no distinction regarding who pays the mortgage. Likewise, it is not necessary for the deed of the property to contain the names of both parties for the home to be considered marital property.
As an equitable distribution state, Pennsylvania adheres to the theory that in divorce, marital property should be divided with regard to the comingling of assets.
For example, if one spouse used inheritance funds or other non-marital means, which is considered separate property, to improve the marital home, the status of both the home and the inheritance money will become comingled. This mixing of ownership often changes the status of both assets, often shifting both to be considered joint property in divorce.
Since the property and the source of improvement funding began as separate property, a court may decide that these factors weigh in on decisions regarding the division of assets.
Moving out of the house does not affect the material interest one spouse has in the house. In other words, you retain part ownership in the property despite having lived elsewhere when the marriage went sour.
If the house is considered joint marital property, both spouses would need to sign off on the sale of the house. If the status of the property is separate, it may be fraudulent for one spouse to sell the property before the divorce decree is final. In fact, trying to do so even prior to filing for divorce is unlawful, as it may be seen as an attempt to disrupt the lawful division of property.
If you are considering a divorce and you have questions about your marital home, it is best to speak to an experienced lawyer.
Couples who are divorcing must split their assets according to state laws. Our Media divorce lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. can help you find a fair divorce settlement that protects your rights and represents your best interests. For an initial consultation, contact us online or call us at 610-565-3701. Located in Media and West Chester, Pennsylvania, we serve clients throughout Delaware County, Chester County, and Montgomery County.
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