It is not uncommon at all for parties to wonder what will happen to their assets, specifically their home, in a divorce proceeding.  The answer is: it depends.  Minnesota law requires that the court make a “just and equitable division of the marital property of the parties without regard to marital misconduct”.  Minn. Stat. § 518.58.  The parties’ home can be and is often one of many assets in a divorce.  There might be boats, motorcycles, snowmobiles, recreational vehicles, other real estate, retirement accounts, and/or other significant personal property at issue in a divorce.  As part of the final resolution, the Court will want an equitable division of all the marital property and debts.  When it comes to the house, it can often be just one piece of the overall asset and liability puzzle.  It is important to note that equitable does not necessarily mean equal.  That said, often the Court considers an equal division of marital assets to be equitable in the vast majority of situations.

In dividing up marital property in a divorce, including the marital home, the Court can consider factors such as length of marriage, any prior marriage of a party, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, an opportunity for future acquisition of capital assets, as well as income of each party.  Minn. Stat. § 518.58.  No one factor is determinative of the disposition of the marital home.  A few specific ones are discussed below.

One factor which may influence a court in determining who should be awarded the house would be minor children.  If there are minor children involved in a divorce and both parties desire the home and one party is determined by the court to be the primary care provider for the children and will be moving forward, the home is likely to be awarded to that person so as to cause as little disruption in the children’s life as possible.  The interests of the minor children rightfully take front and center in a divorce.

A significant premarital or nonmarital claim to the home may be a significant factor.  Premarital claims likely stem from an ownership interest in the home by one party and the recognition of value or equity in that home prior to the marriage.  Nonmarital claims take a number of forms.  A common example might be one’s receipt of an inheritance from a family member they receive during the marriage that is used as a down payment on the home or to pay down debt encumbering the home.  Court’s might be inclined to award the house to someone with a significant premarital or nonmarital interest.  And, sometimes it can be difficult financially for the party to pay the other party the value of their premarital or nonmarital interest in the home to which they would be entitled as well half of any marital equity in the home.

The value the parties place on the home, to the extent it differs, may be a determining factor in who is awarded the home in a divorce.  If the parties cannot agree on the value of the marital home, and all other things are considered equal, the party placing the highest value on the marital home is likely to be awarded that asset.  The court has an interest in maximizing the value of the marital estate.  To illustrate, imagine the parties owe $100,000.00 on their mortgage debt.  Husband thinks the home is worth $320,000.00.  Wife thinks the home is worth $290,000.00. By awarding the home to husband and accepting his value, the court has maximized the marital value of the estate.

Remember that regardless of who is awarded the marital home, there will be a reconciliation done by the Court to the extent the division of the assets of the marriage results in an inequitable disparity.  In the above example regarding the home, husband will now have $220,000.00 in value/equity on his side of the ledger and to the extent there are not sufficient other marital assets to award to wife to equitably divide the property, the court will likely require an equalizer or property settlement payment from husband to wife.  And that equalizer will be based upon husband’s valuation on the home and the $220,000 in equity calculated therefrom.  Hypothetically, if the home were their only valuable asset, husband would likely be required to refinance the home and borrow half the equity, or $110,000, to pay wife to accomplish an equal division of the assets.

This article is not intended as legal advice and only highlights a couple of common considerations of the Court in determining who is to be awarded the house.  There are many others depending on the circumstances of your case.  Every situation is unique which is why consulting with legal counsel is a good idea before you enter into any kind of binding agreement with your spouse in a dissolution of marriage.

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