Who Owns The House In Divorce – The Next Chapter

This economy has seen courts dealing more frequently with the question of which spouse receives the house or sale proceeds, or bears the loss of equity. In the lending frenzy of the last few years, couples eager to get low interest rates accepted recommendations of brokers who suggested that they could get the best loan by only listing one spouse on the loan and title.

The 2005 decision in In re the Marriage of Mathews set forth the proposition that a spouse who takes his or her name off title of the family home to get a better interest rate may lose ownership rights if the spouse whose name remains on the title can show he or she exercised no undue influence in the title change.

On December 16, 2008, California‣s appellate court published In re the Marriage of Brooks and Robinson. In this case, husband and wife purchased a house three years after they married. The down payment and all payments were made from husband‣s earnings, but the house was put in wife‣s name alone for better financing. Despite their marital status, the deed stated that wife was “a single woman.” When wife sold the property without informing husband, he tried to block the sale claiming a community interest. The court rejected his efforts, though, finding that the house became wife‣s separate property when he consented to its purchase in her name alone, absent an agreement otherwise.

This is yet another reminder that couples should be careful when purchasing or refinancing property in the future. If not, that bargain interest rate now could be very costly down the road. And if couples do elect to refinance with only one spouse on the loan, they should take steps to ensure that both spouses‣ interests are protected and their intentions documented.