Divorce is more than a dissolution of marriage. It’s also a division of a shared home and all the appliances, furnishings, and keepsakes within. Places hold memories and many objects carry sentimental value — potentially a decent monetary value, too. What’s the best way to separate the household and everything it contains? How can you and your soon-to-be ex divide real estate and your shared belongings fairly and with as little stress as possible?
As with all parts of divorce, it takes some compartmentalization and grace as you decide what to do with your shared possessions. Here’s how to navigate splitting up your real estate, from the house itself to the assets from any property sale.
How to Divide Real Estate: Equitable Property Distribution During Divorce
The biggest question for most divorcing couples is what to do with your house. Texas is a community property state, which means assets acquired during the marriage are split fairly during the divorce. This doesn’t mean a 50–50 split or that only the person who made the purchase gets the thing, either — the court will determine which allocation of real estate is “just and right.”
In an uncontested divorce, many spouses already have an idea of what to do with the house. Perhaps one of you will stay and the other will move out, or perhaps you’ll both move out. Some people take turns occupying the home with the kids.
In most cases, though, the house is either being sold or it will be occupied by only one ex-spouse. Let’s look at both scenarios.
Keeping the House After a Divorce
A house purchased during the marriage is considered community property. It’s often one of the biggest concerns when deciding how to divide marital property.
If you or your soon-to-be-ex plan to remain in the house, it can be assigned as such in your Final Decree of Divorce. They will typically “buy out” their ex’s share with cash or other assets.
This opens the door to two options:
Option 1: One spouse keeps the house and lives there.
Option 2: One spouse keeps the house and rents it out.
However, it’s important to consider all belongings, especially those of significant value. For example, a judge may not consider it fair to award one person the house along with all the antiques, expensive appliances, etc. Distributing non-real estate assets, such as financial accounts and vehicles, to the other spouse can help balance the scales. Or, a judge may order one spouse to pay their ex part of the equity. Be sure there is a lien on the property to make this enforceable.
Some people refinance the mortgage so the house will only be in their name.
If one person will remain in the house, a Special Warranty Deed must be filed with the property records office. This indicates that the house has gone from joint to sole ownership (or transferred from one house to the other).
Selling the House After A Divorce
If you both decide to sell the house, the resulting funds will be distributed according to the “just and right” philosophy. This doesn’t always mean the spouse who paid more of the mortgage will get all the funds. A stay-at-home wife isn’t necessarily out of luck just because her husband made the payment. By allocating her part of the proceeds from a property sale, a judge can protect a petitioner who was financially dependent on her spouse.
What about property debt?
Whether you’re selling the house entirely or one person is staying, don’t forget your bank. Mortgage providers don’t care if the property owners get divorced. Your agreement with the bank will remain in place, even if you lose ownership. Some women have found themselves on the hook for the mortgage payment even if their ex kept the house and was ordered to pay the mortgage.
What about other real estate properties?
If you or your spouse acquired other Texas real estate during your marriage, such as a vacation home, that is also subject to a “just and right” distribution of assets.
What if one spouse bought or inherited the home before marriage?
Any property, including real estate, that a spouse acquired before marriage remains their separate property. This includes any building or land left to them by parents or grandparents, as well as anything they bought before getting married.
A house inherited by or given to one spouse during a marriage is an exception to the community property rule. That person typically gets the house as it’s considered separate property.
See more frequently asked questions about dividing the marital home.
As you see, even if you agree on the basics, it’s tricky to divide real estate. Let’s say your soon-to-be-ex offers to let you and the kids stay in the house and he’ll keep paying for it. Such an agreement is not enforceable until there is a Final Decree of Divorce — and if he stops paying for whatever reason, the mortgage company will seek payment from you.
Or, imagine you keep the property but decide to sell it later. Without a Special Warranty Deed on file, you may have issues selling the property if your ex’s name is still on the deed. Only a lawyer can write this form for you.
Alex’s Advice
As a divorce coach, Alexandra M. Geczi strives to make women feel empowered during their divorce. The high emotions and chronic stress can easily cloud your judgment. Be sure to make room for self-care and never rush into big decisions about financial separation — regarding real estate or anything else. It helps to have someone in your court (literally!) to provide a balanced, rational perspective.
At Alexandra Geczi Law Firm, we empower you to divide real estate with clarity and confidence. You may hire us for limited-scope representation to fill out deeds and other vital forms, even if you’re pursuing an amicable divorce.
How to Split Home Equity in a Texas Divorce
Whether or not you’re selling the marital home, the equity becomes a key point in dividing community property. Whose equity is it? How does that translate into what each spouse will take away from the divorce? Let’s take a deep dive into these questions.
Step 1: Determine the home’s value
Equity is the difference between the mortgage amount and the current appraised value of the home. As you’ve paid off the mortgage, this number ideally grows over the years. But who can lay claim to it?
As discussed earlier, Texas is a community property state, which means any real estate acquired by a married couple should be divided equitably. So the first step to any negotiation is to know what you’re working with.
Get a licensed real estate appraiser to conduct an appraisal, or have a real estate agent perform a comparative market analysis. Subtract your outstanding mortgage balance from that number. Remember, this is no guarantee of what you and your soon-to-be-ex would get upon sale, but it gives you an idea of how your assets could be divided.
Step 2: Decide who’s keeping the home, if anyone
As mentioned before, one spouse can keep the home. However, it’s vital to refinance the mortgage and file a Special Warranty Deed must be filed with the property records office. This helps prevent one spouse from being on the hook for the remaining mortgage.
The spouse who keeps the home can buy out the other’s share. Or the equity is awarded to one spouse, and the other gets the equivalent in other assets.
If you want to sell but aren’t ready — say, if you plan to keep the home until the kids move out — it can feel uneasy to continue sharing this major asset with your ex. You can set a “sell by “date in your divorce agreement to pave the way for this foundation. Documenting the home’s current value and your respective contributions at the time of separation can help you navigate the equity challenges when the time comes.
Step 3: Determine who gets the proceeds from a home sale
In general, the proceeds from selling a home are divided equitably — assuming you co-purchased the house. However, this can get complicated with home equity if one spouse contributed more income toward paying off the mortgage. You can work with a mediator, or a judge will consider your respective situations to determine a fair and just division of the proceeds.
What if you owned the home before marriage? Your ex could lay claim to any equity you accrued during the marriage, even if the home is arguably yours. This might be resolved by dividing other assets to make up this “community” home equity. As always, consult with your legal team to best understand your options.
Wrapping Up
Dividing the marital home brings up many logistical, financial, and emotional decisions. As a general rule, assume that every change in property ownership and living situations carries a risk. Make sure to document everything and consult with lawyers to cover your bases. Our goal at Alexandra Gezi PLLC is for you to feel empowered rather than relying on assumptions or misinformation.
Part II of this blog focuses on dividing household items, from high-value belongings to sentimental objects.
Interested in hiring us for divorce services or coaching? We offer both full and limited-scope representation, and we can also complete the necessary deeds and forms for property separation in a DIY divorce.