The marital residence is often the most valuable asset of the marriage. Hence, classification for property distribution purposes is very important. Property may be classified as separate, marital, or mixed. In jurisdictions adhering to the ''source of funds'' theory, payment of the mortgage with marital funds constitutes a marital ''acquisition'' of the property. Where the ''inception of title'' approach is taken, the characterization of the property is fixed when the property is acquired, or sometimes when the right to the property is acquired. · Separate Property Conflicts Conflicts often arise between the spouses when the home was acquired by gift, inheritance, or prior to marriage so that it may be considered separate property. In all-property jurisdictions, the court has equitable power to divide property acquired by gift or acquired prior to marriage. Even in dual property jurisdictions, gifts or inheritances might fall within the marital estate. In certain jurisdictions, the home is likely to be included in the marital estate where the court finds hardship because it is such an important asset. However, in California courts, court considers gifts, inheritance or acquired prior to marriage or after separation to be separate property with several exceptions.
· Divisibility of Separate Property A major factor that influences divisibility is the contribution of the non owner spouse to the marriage and the extent to which that spouse has facilitated the maintenance, improvement, and appreciation in value of the home. The divisibility of separate property is equally influenced by the extent to which marital funds were used for the repayment of any mortgage held on the property. Other influential factors include the length of time after acquisition that the marriage continued and whether the parties became accustomed to a lifestyle dependent upon the property.
· Valuation Experts using standard appraisal techniques usually perform a valuation of the home. It is preferable to value the home as close as possible to the time of distribution. To ascertain the value of the property for purposes of distribution, all expenses associated with the sale of the property should be included. The risk of any defective title also can be an appropriate factor to take into account when determining valuation of real property as well as anticipated or potential tax consequences.
· Division by Sale Sale of the marital home is often disadvantageous to at least one of the spouses and usually is disruptive to the children of the marriage. Common reasons for not selling at the time of dissolution include poor market conditions, tax consequences, and the fact that the residence is suitable for the parties' minor children. The sale of a marital home may be ordered and the proceeds divided between the parties where a couple's equity in the home is large and the property cannot be partitioned or physically divided. It may be the preferred method of distribution when a childless couple dissolves their marriage because division of the proceeds, after the home is sold, is relatively uncomplicated.
· Award to One Party At times the determinative factor allowing for division is the economic need of the other spouse. Statutes often list the desirability of awarding the family home or the right to dwell in the home for reasonable periods of time to the custodial parent as a factor for courts to consider in making an equitable distribution. Strong personal ties to the residence may also be a factor in justifying an award to one of the parties. However, the partnership nature of a long-term marriage or economic need may outweigh those personal ties. Award of the home to one spouse avoids expenses associated with a sale and the necessity of finding new housing for that spouse. Therefore, a distribution has special appeal if there is property to award the other spouse as compensation. Various methods of offset and justifications for unequal division are utilized to avoid sale and allow the home to be awarded to the spouse with meager assets.
· Use and Occupancy There is a strong policy in favor of awarding the use and occupancy of the marital residence to the parent with primary custody when there are minor children of the marriage. This enables the custodial parent and children to continue living in the home when sale of the home and other assets of the marital estate cannot provide comparable housing. In many jurisdictions a divorce decree will operate to convert a tenancy by the entirety into a tenancy in common between the parties, thus making the property subject to a partition action. As a result, a mortgagee or some other successor in interest to one party's rights may become a tenant in common with the occupying spouse, unencumbered by any rights of survivorship that the occupying spouse enjoyed when the property was owned during marriage as a tenancy by the entirety. However, if one spouse is awarded a percentage interest in the house other than fifty percent, the creditors or successors in interest of that spouse will be limited to rights in the percentage granted to that spouse in the decree, even if the debt or obligation was incurred prior to dissolution. · Award of Rent and Reimbursement for Mortgage Payment by one Party When one party resides exclusively in the family home, the other party has a right to ask for payment of rental value of the family home and attribute that total amount for duration of the other party’s exclusive use at the end of distribution of assets. Hence, the party who is not residing in the family home receives credit for rental value of the house to equalize both parties rights over the same community property at the discretion of the Judicial Officer. When one party pays for the total mortgage of the family home in its entirety after the date of separation, the payor requests reimbursement for one half of the mortgage payment to avoid unjust enrichment by one party to detriment of the other. All these credits will be determined at the time of trial or through settlement between parties. The Family Business
If there is a family business, an expert can evaluate the business and there are several mechanism to deal with division, distribution or buy-out of one spouse by the other or between the two parties.
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