The most valuable asset that most Americans own is their home. And it is not simply the physical representation of our wealth and equity; it is also enormously important on a day-to-day basis. For these reasons and more, the question of what to do with the marital residence often looms large in any divorce.

The answer to this question can be influenced by whether one spouse already owned the home prior to marriage or both spouses co-own it equally (with both names listed on the mortgage). Assuming it is the latter, any disputes about the house will need to be resolved by agreement between the couple or, if they are unable to reach agreement, decided by a judge.

The Three Basic Long-Term Options

The marital residence may be the most valuable asset, but it is still an asset subject to division in divorce. Here are the three basic ways that the house can be “divided” in the divorce:

  • The couple decides to sell the house and split the proceeds from the sale.
  • The first spouse keeps the house and either buys out the second spouse or trades away other assets equivalent to the second spouse’s share.
  • The second spouse keeps the house and follows the same procedure mentioned above.

It is important to have the home accurately appraised and to carefully asses each spouse’s share of equity in the residence. If purchased together after marriage, each spouse may own 50 percent. But there are cases in which one spouse purchased before marriage and made payments for a couple years, then added the other spouse to the mortgage after marriage. In such cases, the first spouse may be entitled to a larger stake in the residence.

What Should you Do While Divorce is Pending?

This is a trickier problem to solve, because with a jointly owned house, both spouses have an equal right to stay there despite the objections of the other. Therefore, if at all possible, you should negotiate housing arrangements with your spouse until the divorce is finalized. Here are just some of many possible ideas:

  • Both moving out, finding separate places to live and putting the house up for sale
  • One spouse moving out and the other spouse staying (which doesn’t automatically determine which spouse will keep the residence post-divorce)
  • Both spouses staying in the house and finding creative ways to divide the house into separate living spaces
  • (If minor children are involved), allowing the children to stay at the house full-time while the parents co-rent an apartment and take turns living with the kids or living alone

Dealing with the marital residence is tricky for many divorcing couples, but it can be done successfully. If you worry about how this issue will be resolved, please discuss your concerns with your family law attorney early on in the process.