Welcoming a spouse into your home can be an important and joyful step for many couples. However, joining your households could lead to financial concerns during divorce. What happens to the home you owned before your spouse came into your life?
Is your house your separate property?
Generally, a person is the sole owner of what they owned before their marriage or received as a gift or inheritance. Property and debt acquired after the wedding is usually marital property that is jointly-owned by both spouses, and this is the property that the court divides during divorce. As a result, a house inherited by one spouse during the marriage or purchased before the wedding would be one spouse’s separate property.
In some cases, however, separate property can become marital property through a process called “commingling.” This process occurs when a couple mix their separate and marital property, making it difficult to identify which property was solely owned by one spouse. The court may divide this commingled property during the divorce process.
What forms might commingling take?
Because homes require ongoing financial upkeep, commingling can occur in many different ways during a marriage. Some ways that a house’s value may become commingled include:
- Making mortgage payments using marital funds
- Making improvements or additions using marital funds
- Refinancing the home to add the non-owning spouse’s name to the deed
If commingling occurs, the portion of the house’s equity acquired during the marriage or the value of any improvements made could be subject to division during the divorce process. Homeowners should be aware of the impact of commingling and carefully consider its financial impact when approaching the divorce process.