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Deciding what to do with your home in a California divorce

Real estate in California is somewhat notorious for carrying a steep price tag. Even smaller communities in rural areas have higher housing prices than many other states in the country. For homeowners, that substantial value for the marital home is a good thing, as it represents a pool of established wealth.

However, it can lead to major complications when it comes to divorce. It is likely that both spouses hope to retain the house or at least a fair share of the equity in the property.

The more the home is worth, the more strongly either spouse will feel about retaining their ownership of the property or their interest in it. Understanding how California approaches property division and marital homes can help you determine the best strategy for your upcoming divorce.

Staying in the home could help you retain it

Determining where you want to live during a divorce is difficult and confusing. For some people, it can be an emotionally trying experience to remain in the marital home after the marriage has started to fall apart. For others, the marital home may be a source of security and stability during an uncertain time.

If you are the parent assuming primary custody of your children, staying in the marital home can help keep things more stable for them.

Regardless of your reasoning behind staying in the home, doing so could help you in court later. The courts will look at possession of the property when determining how to dispose of it in a divorce. If you are living there, especially if you stay there with your children, that could sway the courts toward allocating possession of the property to you. However, that doesn't mean you will own the home outright after the divorce.

Regardless of who lives there, the courts will probably split the equity

If maintaining possession of the home is your primary concern, you should understand that you will not receive the equity in your home, unless you have substantial other assets to offset your spouse's portion of the equity. California is a community property state: Any assets acquired during marriage get split in a divorce. That includes equity in your home.

If you or your spouse chooses to retain the marital home, the courts will probably require that you refinance the property. Your ex can receive a portion of the equity or other substantial assets, such as investment or retirement accounts, to offset the financial impact of the home on your marital estate.

If you can't qualify for financing on your own, that may influence the courts to award the home to your ex. Other times, they may choose, instead, to order you to sell the home and split the equity.

Understanding that these are the most common outcomes when handling a home in divorce can help you determine which outcome is preferable. You can then work toward making that arrangement with your ex or asking the courts to consider this outcome.

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