One question that comes up regarding the distribution of marital assets is what happens when one spouse already owned the house the couple lived in during the marriage.  For example, assume the wife owned a house for two years before the marriage, but for the ten years of the marriage the couple lived there together. For those ten years the couple paid the mortgage and made considerable improvements. Does the wife get it all?

 

     Many factors enter into how property is divided in a marriage, and so it is important to consult an attorney to be certain you know your rights. With respect to the house, it likely the husband will have at least some marital equity because he helped to pay the mortgage and the improvements have increased the value of the property. Under some situations, the house could be considered completely marital property, and must be divided.

 

     Unless the parties reach an agreement, as a general rule, the divorce judge will decide what items of property are marital and what items are separate. Separate property usually falls within three categories: (1) property owned prior to the marriage, including the interest or increase in value of the property; (2) inherited property; and (3) property acquired by gift, including property gifted from one spouse to the other. All other property is considered marital and subject to equitable division (which generally means equal).

 

     In the case of the house, I would first want to know whether the wife has gifted the house to the marriage. The best evidence of this is if the house was titled now in both names. Other evidence could include statements that this is “our house” or telling friends the house belongs to both of you. This is much harder to prove, but not impossible. 

 

     Even if the entire amount of equity in the house is not marital, a portion of the equity likely is. The principal that has been reduced by the mortgage payments is considered a marital asset. Further, if the property has increased in value because of the improvements, the increase in value is also considered marital property.

 

     When the husband consults with a lawyer about his divorce, he should be sure to discuss fully all the statements made by his wife about the house, the principal that has been paid during the marriage, and the value of the improvements. He likely can receive some amount of equity from the home either in the form of other property, cash, or a payout of his share of the equity.