How to Divide the Marital Home During Divorce

Most marital homes are considered as marital property to be divided during a divorce. Illinois is an equitable distribution state, so instead of dividing property evenly down the middle, it’s divided fairly between the spouses.

Generally speaking, if you are in a marriage with kids, the spouse with the most parenting time will get to stay in the home. Whichever spouse does not stay in the home will be compensated for their share in other ways. This can be accomplished by:

  1. Agreeing to a buyout
  2. Giving up other assets
  3. Taking the home instead of alimony (spousal support)
  4. Co-owning the house

Often, the family home is one of the biggest assets to be divided in a divorce. If you and your spouse can come to an agreement on how best to split its value, it will significantly simplify the property division process. Here are a few of the most common options to consider when dividing a family home in a divorce:

Sell the House

If it’s possible, and neither spouse wants to continue living the house, one option is to simply sell it and split the proceeds. To sell a house you’ll need to:

  • Pay off the mortgage
  • Pay any home equity lines of credit
  • Pay any capital gains tax

While it might seem like the simplest option, many people lose sight of the many “hidden costs” that come when you sell a house. Not to mention having less control over the market conditions when you sell. Additionally, you’ll need to be able to agree on a real estate agent, agree on an asking price, and pay for any repairs.

Similarly, some savvy buyers may wait you out if the house doesn’t sell right away. So while on paper it’s the simplest option, there are a few hidden risks.

Agree to a Buyout

If one spouse wants to stay in the home, then one option is to buy out the other person or trade. In other words, whichever spouse moves out would be paid for their share of the house in money or other marital assets. This can be a great option when there are enough marital assets to rival the value of the house.

Some risks to consider for this option:

  • The buyer may end up paying too much if the value of the house depreciates
  • The seller may end up losing out on future appreciation of the property

If a divorce case ends up dragging on for a long time, it may be wise to value the property at the start and then again before the final judgment.

Give Up Other Assets

One way of executing a buyout is for the spouse staying in the home to give up other marital assets instead. This could be things like retirement funds or investments. Usually, this is done by having a third party value the home and property. This allows the spouse being bought out to get a fair value.

Buyout Payments Over Time

Most people can’t afford to buy a large portion of a house over time. So instead, the spouse staying in the house may agree to buy the other out by making payments over time. The terms of the payments would be included in the divorce settlement. Under these circumstances, until the buyout is completed, both spouses would still own the house.

Giving Up Spousal Support

Many times, a lesser earning spouse may earn spousal support (alimony as part of the divorce. If that spouse decides to stay in the house, it might be deemed fair to significantly reduce alimony or not pay it at all in exchange. If you and your spouse are on amicable terms, you have control over how exactly to arrange this.

If you present terms to a judge that are equitable, they will likely approve it.

Co-Own the House

While this option is less common, it is possible to continue co-owning the home after a divorce. Most times, this is only done when one spouse is buying out the other over time. Of course, there are some disadvantages to this:

Credit Scores and Reporting

As long as both spouses own the property, the mortgage will still show up on both of their credit reports. This means that large debt will stow show up on your credit, even if you no longer live at the house. This can make it hard to obtain financing for other things.

Upkeep Costs

Like the mortgage, both spouses are still responsible for upkeep on the property if they co-own it. Tracking who can pay for what when one spouse no longer lives there can be an unneeded hassle.

Taxes

When co-owning the house, only one spouse will be able to claim the interest deduction on taxes.

Other Risks

There are other risks by continuing to own such a large piece of property together after divorce. For instance, what if the other spouse passes away? Unless they have a will, managing the property will be difficult. Less morbidly, if one spouse gets sued or files for bankruptcy you have little recourse to protect yourself.

Co-ownership is certainly an option, but it would be dishonest to say there are no risks. If you are leaning towards co-ownership carefully consider the risks.

Frequently Asked Questions

What happens when both parties want the house in a divorce?

In Illinois, there are many factors that go into dividing property, including the house. Illinois is an equitable distribution state, meaning property and assets are divided fairly but not always equally. If your case goes to trial, a judge will consider various factors including the incomes of both spouses, how much each contributed to the mortgage, among many other factors.

If you can come to an amicable agreement, this is always better. Typically if one house chooses to stay in the home, the other can be bought out using other assets from the marriage or with payments over time.

In divorces involving minor children, the parent with the majority of parental responsibilities and time (custody and placement, colloquially) will be allowed to stay in the house. This is because it’s considered in the children’s best interest to continue living in the family home.

However, even in that scenario, the other spouse will be compensated in some way.

What is considered marital property in Illinois?

Marital property is anything that is purchased or anything that had a significant joint-income invested into it during the marriage. But there are a few particular considerations when considering a marital home as marital property or not.

Technically, if one spouse purchased a house in their name before the marriage, then it may be non- marital property. However, there are ways that a piece of property can change into marital property over the course of a marriage.

For instance, if a couple refinanced a mortgage in both their names, then the house would then belong to them. Having both names on a document is not the only way a home can become marital property.

If joint funds were used to make significant improvements, or a large portion of the mortgage was paid by both spouses the house will likely be considered marital property.

Can a husband kick a wife out of a house in Illinois?

It is not uncommon that when there is a divorce, one spouse will volunteer to move out of the house in order to separate from the other person. However, if one spouse refuses to leave you can only forcibly remove a spouse if you file a petition only when special circumstances are met.

Am I more likely to get the house if my husband cheated or abandoned me?

Illinois is a no-fault divorce state, meaning that neither party needs to prove misconduct to get a divorce. That also extends to how the court determines property division.

Because fault grounds (adultery, etc.) are not considered in a divorce, they will not have an impact on who gets to stay in the house.

How does Illinois determine how property is divided in a divorce?

Illinois is an equitable division state, not a community property state. This means that the marital property is not divided equally between the spouses. Instead, the court takes into account the incomes of both spouses, the length of the marriage, their earning power, medical needs, and a wide variety of other factors.

Then, a judge will divide out the property based on what they deem as fair to both parties. Items that were gifted to or inherited by one spouse, will be considered non-marital property and be given back to them. Additionally, anything owned before the marriage that was not commingled into marital property is considered non-marital.

Download our free property division worksheet which covers a wide range of asset and debt categories to help you stay organized.


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