Is our Home Marital Property or Separate Property in the Divorce?
A home is usually a couple’s biggest asset.
As the biggest asset.it plays a very large role in divorce negotiations.
Getting the home wrong in divorce can cost you tens-of-thousands of dollars.
Marital Property v. Separate Property
In Utah divorces, there are two types of property: marital and separate.
Marital property is, you guessed it, property of the marriage. Marital property is pretty much anything acquired during the marriage, regardless of whose name is on title.
Separate property is property that belongs to only one spouse. Separate property usually includes:
- Gifts from family.
- Property acquired before the marriage that’s never been paid for with marital money.
- Property and monies in family trusts.
Our Home: Marital Property or Separate Property?
The rule of thumb when it comes to the marital home is this: it’s marital property.
It doesn’t matter if one spouse’s name isn’t on the mortgage, or only one spouse’s name is on the deed. It doesn’t matter if one spouse didn’t work and the other contributed 100% to the mortgage.
If you bought the home during the marriage, it’s almost 100% sure to be marital property.
There are a few ways a home could be separate property, but by far the most common one is this: the home was purchased by one spouse before the marriage, and the other spouse was never put on the mortgage or the deed.
This is a rare occurrence, but it does happen. However, even though the entire home might not be marital property, parts of it are if martial money has been used to pay the mortgage and for improvements.
If marital money has been used on the home, then both spouses will be entitled to the increase in value while marital money paid for the home.
Here’s an example of what I mean: Husband buys home five years before Husband and Wife get married. Husband and Wife live in Husband’s home for twenty years, then divorce. During the marriage, Husband and Wife work, and pay for the home with their incomes. When they divorce, it’s likely the home will be considered separate property, but Wife would be entitled to half of the home’s increase in value during the marriage. Husband would be entitled to all value increase for the five years before marriage, and then half of the increase during the marriage.
There are a few other situations in which the home could be separate property, but these are pretty rare in real life:
- Couple lives in an inherited home.
- Couple lives in home owned by one spouse’s family trust.
- Couple lives in home owned by one spouse’s family member (usually a parent or sibling).
Those situations, while rare, are certainly interesting to deal with because they’re so fraught with family issues.
The bottom line the vast, vast majority of divorcing couples is that the home owned during the marriage is marital property.
And, as marital property, the value of the home will be split between the spouses.
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