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What happens during divorce if one spouse’s name isn’t on the deed?

On Behalf of | Feb 19, 2024 | Equitable Distribution

Married couples often buy homes together. Both spouses are usually named on a mortgage for their shared property and on the deed as a result. When they divorce, there is little question that the home where they lived is part of the marital estate and therefore subject to equitable distribution rules under North Carolina law.

However, not everyone has a straightforward claim to the home where they live. Sometimes, one spouse already owned the house prior to marriage or inherited it from family members. They might then try to insist that the marital home is their separate property during divorce negotiations. Such claims may leave one spouse very concerned about their finances following a divorce.

If a spouse is not on the deed for the marital home or the note for the mortgage attached to it, does that mean they have no interest in the property if they divorce?

Commingling and investments complicate ownership

In theory, assets that one spouse inherited or owned before marriage are separate property. In reality, someone who owns a home before marriage probably relies on marital assets to pay for the property. Houses are expensive to maintain. In situations where one spouse owned the home prior to marriage, they may still have a mortgage to pay. They likely used marital income to cover monthly mortgage expenses, taxes and insurance. Beyond that, the spouses may have invested marital resources in the maintenance and upkeep of the physical property itself.

Both financial contributions toward the property and sweat equity accumulated by working on the home during the marriage could give his spouse a partial interest in the property during divorce proceedings. Establishing how much marital income went toward the maintenance of the property or the fair market value of services rendered could help someone as they prepare to negotiate equitable property division terms with their spouse.

Even if someone cannot request possession of their home in the divorce, they may be able to receive a portion of its equity as part of the marital estate. Those unfamiliar with the law and their rights sometimes agree to highly unfavorable property division settlements. Especially if people hope to pursue an uncontested divorce, they’ll likely require guidance about property division matters to better ensure that their interests are protected as they move forward.