There are typically three options when considering what to do with a house in a divorce. Those choices are the wife can keep it; the husband can keep it; or, it will be sold.  As with most issues in a divorce, this can be determined by agreement of the parties.  If the parties don’t agree, the award of the home depends on the facts and the law.

The general rules of property division in a Michigan divorce provide that property acquired “by reason of the marriage” or “during the course of the marriage” is equitably, or fairly, divided.  Property acquired by reason of the marriage or during the course of the marriage is labeled “marital” property, and property acquired prior to marriage or by inheritance or other special circumstances is called “separate” property.  This analysis is the first step in looking at dividing property in a divorce. This means that if the house was purchased or had a substantial increase in equity during the marriage, the equity of the home most likely will be equally divided in a divorce

So, let’s assume the house was purchased during the marriage with money earned during the marriage and is, therefore, “marital property.”  The house is now worth $200,000 with a mortgage owed of $150,000.  That leaves $50,000 in equity, which is the real value of the house.  If you want to keep the house and you have no other assets of any significant value, you could keep the house and owe your wife $25,000, or half of the equity.  Likewise, if your wife wanted to keep the house, she would owe you $25,000.

In either event, the party retaining the home would be expected to refinance the mortgage loan to fully assume all of the liability associated with it. If the two of you disagree on who should get the house, or want to sell it, then you would list the house for sale and split the net sale proceeds equally.

If you owned the house before the marriage, you would most likely want to be awarded the property in a divorce.  This would be possible, but the question of whether you owe your wife any money for the value of the house depends on what has happened since you purchased it.

Your house from before the marriage, which is your separate property, can become marital property.  For example, if you put money into the house by doing some remodeling, or if you increased the equity substantially by paying down the mortgage loan during the marriage, you could end up having to pay your wife for the increase in value of the house during the marriage related to this investment. Adding your wife’s name to the deed or mortgage of the home during the marriage could also affect how much of your pre-marital equity you will receive.

In general, you are still back to three options of who gets the house.  You keep it, your wife keeps it, or you sell it.  But there can be other complications, such as a house with no equity, a house in foreclosure, or a house worth less than what you owe.

Your attorney needs to start with the facts in order to advise you regarding what to do with a house.  We will need to know the approximate value of the house, how much is owed, whose name is on the debt, and when the house was purchased.  Moving out of the home prior to the divorce could impact many issues as well, so consulting with the attorneys at ADAM is a good start before taking any action.

About ADAM (American Divorce Association for Men)

The American Divorce Association for Men (ADAM) is a group of highly qualified attorneys who advocate for men’s rights in all aspects of family law. In addition, ADAM represents men, women, or married couples in adoption matters.  Since 1988, ADAM has been aggressive, diligent, and uncompromising when representing their clients. A team of compassionate and skilled family law attorneys, ADAM is dedicated to being Michigan’s leading divorce attorneys for men.