Dividing Property: Who Owns the House You Live in?

Your residential homestead, assuming it is not owned by a third party, can be owned 1) by you as your separate property; 2) by your spouse as your spouse’s separate property; 3) by the community estate of you and your spouse; or 4) a combination of some or all of the three estates, which is called “mixed title.” The title to the property is fixed at the time it is purchased, based on marital status at the time of purchase or, if married, based on the money used for the purchase. Here’s how determining the “character” of the house works. It’s your separate property if you bought it before marriage using only your money and/or a mortgage only you signed, or at least just you and somebody other than your spouse (maybe a parent or a prior spouse of yours). Those same rules would apply to make it your spouse’s separate property. It’s community property if it was purchased during marriage with money belonging to the community estate, such as earnings received during marriage, and/or a mortgage entered into during marriage. Typically such a mortgage would be signed by both you and your spouse, but the same rules would apply even if it is just signed by one of you, unless the lender agreed in writing to look only to your separate property for repayment of the mortgage. It’s mixed title if, say, you came into the marriage with money in the bank which you used for a down payment and the rest of the purchase price was paid by a mortgage and the house was bought during marriage. Let’s say for simplicity the house cost $100,000 and you paid $10,000 of your premarital money as the down payment and you and your spouse borrowed the other $90,000 via a mortgage. That house would be 10% your separate property, and the other 90% would be owned by the community estate, since the community estate is liable for repayment of the mortgage. That same outcome would result if you, let’s say, inherited $10,000 from your rich uncle and used that money as the down payment and you and your spouse borrowed the rest of the purchase money. The “inception of title” rule applies in determining whether your house is community property, your separate property, your spouse’s separate property, or mixed title. That means the character of the house is fixed at the moment somebody acquires the right to title, based on the character of the money used to acquire the right to title. For more information, please be sure to contact one of our family law attorneys by calling 972-569-3166 today.