Divorce and Home Ownership: Why It May Not Be Fair!

Lately, we've been getting more questions from current clients about home ownership during a divorce. Not every circumstance is the same but there are certain similarities to every case. Maybe this scenario describes your situation.  You and your significant other - your SO, for short - have decided to get married and buy a house, but not necessarily in that order.  Let's say your SO is the one making the most money or who has plenty of money.  You are the one putting in all the sweat equity of driving around looking at houses, dealing with the realtors, and all the hard work of finding a place to buy and getting settled in the new house.  Your SO writes a check for the down payment and takes out a mortgage to fund the rest of the purchase price.   Maybe all this happens shortly before your planned wedding.  You get married, live happily together in the house for some number of years, raise kids there, pay the monthly mortgage, taxes and insurance on the house, replace the water heater when it wears out, pull out the carpeting and put down expensive marble and wood flooring (maybe even paying for that with your year-end bonus), and on and on.  Who owns the house?  Your former SO who is now your spouse!  Do you have any titled interest in it?  No!  Does that seem fair?  No!

Or maybe this scenario describes your situation.  You and your SO are both homeowners when you decide to get married, and agree that it makes more sense to sell your house and keep your SO's house as your family residence.  Then you take the proceeds of sale of your residence (which is your separate property) and use it to pay down or pay off your SO's mortgage and maybe add an extra room, or put in a swimming pool.  Who owns the house?  Your former SO who is now your spouse!  Even though you have put a lot of money into the house you have no titled interest in it.  It is your spouse's separate property.  If you get divorced, the judge has no power - no jurisdiction - to divest your spouse of his or her separate property.  The right to keep your separate property is protected by the Texas constitution. So what was the Texas legislature thinking when it made up all these laws?  Public policy is the term used to denote long-held principles of law, time tested.  Public policy sort of hovers above all, and the legislature knows it is not supposed to tinker with public policy.  Texas judges frown on that.  It is the public policy of Texas to protect the ownership of a spouse's separate property.  Even so, they did tinker with it, enacting a law which made it possible for the community estate to reap some benefit for the increase in equity acquired during marriage through the pay-down of the mortgage on a spouse's separate property.  It was complicated and sometimes resulted in as much unfairness as existed before the new law, so it was repealed. It simply is not possible to enact a law which perfectly fits every situation.  Sometimes laws are enacted literally to fit just one person's situation.  Sometimes, they hang on the books leaving judges and lawyers to try to make way around them.  If you are thinking that after having read all the information you can find online - most especially on this website -  you are now ready to proceed on your own, better think again!  There is not a way around everything, but there is a way around many things. The best way around some obvious inequities is for you and your spouse to write up an agreement covering what the two of you think is best in your circumstances.  Once you have both signed it, after navigating through and around a few legislated hoops and roadblocks, then the two of you are in charge of your destinies having overridden the statutes.  You can have as many postmarital agreements as you want, as your changing lives call for, so long as you both agree.

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