Should You Keep Your House in a High Asset Divorce?

 Posted on February 07, 2020 in High Asset Divorce

When you are thinking about the financial issues and economic realities of a high asset divorce in Austin, Texas, one of the things you may be considering is whether it makes sense to stay in your marital home or to sell the property and share the profits. First, you will need to determine whether the home is likely to be classified as community property. If so, it is important to consider all factors in determining whether it makes sense to keep the property. Our Austin high asset divorce lawyers will say more about the complications of keeping a marital home after a high asset divorce.

Is the Marital Home Community Property?

Before you start to consider whether it could make sense to negotiate a property settlement in which you keep the house, you will need to know first whether the house is even likely to be classified as community property.

As you likely know, Texas is a community property state. Accordingly, under Texas law, courts divide community property (or property of the marriage) between the spouses, while usually, separate property is not divided. For many Austin couples, the marital home is considered community property or, at least, part of the value of the home is community property. While a number of Texas couples purchase a home together after they are married, there are a variety of ways that a marital home may have characteristics of both community property and separate property. For example, if a couple uses separate funds to place a down payment on the house but makes mortgage payments from community funds, commingling has occurred and the types of property will need to be traced out.

In some situations (although it is rare), the marital home is actually separate property because it was purchased with separate funds prior to the marriage and was maintained with separate funds during the marriage, or a prenuptial agreement identifies the home as separate property.

Does It Make Sense Financially to Keep the House?

Assuming the house is community property (and thus divisible in the divorce), does it make sense financially to keep it? While this is a question that many spouses face regardless of their net worth, the inquiry can be particularly important in a high asset divorce—especially for a spouse who was not the primary earner during the marriage.

If you have a marital home in Austin worth approximately $2 million and it is the home where you have been raising your children and sponsoring community events, you might want to do everything you can to keep the house. You might even be thinking that it makes sense to negotiate a property settlement with your spouse in which you give up your claim to most other community property if it means you can keep the house. However, if you were not the primary earner in the family during the marriage, staying in the house simply might not make sense. Indeed, given that it is pretty difficult to obtain alimony or spousal support in Texas, you may not be able to afford the home.

According to Realtor.com, if you have a $2 million home in Austin with a 30-year fixed mortgage and a $400,000 down payment, once taxes and insurance are taken into account, you are likely to still have a mortgage of more than $12,000 per month. Once you also consider the upkeep of the home—if an appliance needs replacing, for example—you simply may not have the liquid assets you need to stay in the property.

Contact a Texas High Asset Divorce Attorney

If you are anticipating a high net worth divorce and have questions about keeping your home, you should speak with an aggressive Austin high asset divorce attorney. A complex child custody attorney or complex litigation attorney at our firm can also help. Contact Powers and Kerr, PLLC at 512-610-6199 to learn more.

Source:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.6.htm