Many people have heard stories about people losing their homes and life savings during divorce. Some people are so anxious about what divorce might mean for their finances that they remain in unhappy marriages for years.
One common claim that people often share is the assertion that someone who leaves their marital home during a divorce will lose the home. Is it true that moving out irrevocably alters the outcome of property division proceedings?
The courts try to be fair when dividing property
Regardless of what people may have heard about divorce, the reality of divorce proceedings is different from exaggerated stories and worst-case scenarios. The claim that someone might use the home in a divorce by moving out may stem from people losing possession of the marital home.
Typically, only one spouse can live in the home after divorce. That doesn’t mean they keep it outright and get to retain all of the equity as well. Under equitable distribution rules, the courts have to consider the value of all marital property and the overall division of the marital estate when allocating assets and debts.
If one spouse moves out of the marital home mid-divorce, the other spouse may have an easier time asking to retain possession of the home later. However, it is sometimes possible for the spouse who moves out of the home during the divorce to ask for possession of the home and to move back in later.
Even if they never move back into the marital home, they can keep some of its value after they divorce. The equitable distribution rule requires that spouses or courts consider the overall economic value of all marital property. That includes equity accumulated in the marital home.
The spouse who moves out can receive other assets to offset the home equity they lose because of the divorce. They could keep a small business or a retirement account. Sometimes, the spouse who stays in the home has to refinance the mortgage so that they can withdraw equity and use that to appropriately compensate the other spouse
The spouse leaving may have to continue making financial contributions to the marital home to protect their interest in the property. Any major decisions related to asset division, relocation and divorce strategy typically require careful planning to help ensure that the concerned individual receives fair treatment and a reasonable divorce outcome.
Moving out won’t prevent someone from requesting a fair share of the marital estate when they divorce. People who understand the basic rules that govern divorce proceedings may more effectively strategize during their divorce.