a stairway with no house

A House Divided: Divorce When You Work From Home

Goldberg Jones Divorce, Divorce Process, Finances, Goldberg Jones Radio Leave a Comment

Dividing a home during a divorce tends to get complicated. It’s often the biggest asset on the table. When you purchased the house, where the down payment came from, sweat equity, and more all impact how the courts may handle the situation. There’s a ton to think about. And what if you work from home?

Many people work from home or run businesses out of their houses. If they lose their house in divorce, they may also lose their income. Does the court consider this? How does it impact the division of property?

Rick Jones, one of our founding partners, regularly appears on the Danny Bonaduce and Sarah Morning Show, where he tackles family law questions from listeners. On a recent installment, a caller finds herself in this very situation. Not only does she run a business from a shared home, the house itself also forms a key component of how she earns a living. What can she expect from the divorce? How will this change her income?

In the short-term, it sounds like there’s good news. In the long-term, however, things get a bit trickier when you work from home.

Caller Question:

“I’m getting ready to file for divorce, and one of the assets is the house. I can’t afford the house on my own because I’d basically be ‘house poor.’ He makes three times the salary of me, but I also operate a business out of my home. In the home, there’s a detached garage in which I have an event space that I use. So I have to close my business unfortunately if he forces me out of the home.”

Related Reading:  Should You File For Bankruptcy or Divorce First?

Listen to the Conversation Below:

Rick’s Answer:

“There’s both a temporary division of assets and a permanent division of assets. On a temporary basis, the court isn’t going to boot you out of the home because it’s interrupting a cash-flow that’s happening right now. So I fully expect you to retain possession of it while the divorce is pending. And then permanently, yes it’s an asset, it’s a widget, it’s an unnamed piece of property that has a value to it.

“Ultimately it’s about a spreadsheet analysis. You say, ‘To keep it I’d be house poor.’ What I don’t know is if you’d considered the fact that because there’s a significant difference in income between the two of you, that maybe you’ve got some spousal support coming in for a period of time that might help you with that.

“Or, the other thing is, maybe you exchange spousal support for a greater percentage of the assets. Which means you may walk away with greater equity or [be able to] pay down on the mortgage.”

Related Reading: Dividing Military Benefits and Pensions

Caller: “My spouse is also former military. Even though I wasn’t married to him the whole 21 years of his career, I was married for greater than ten years. I’m wondering if I’m entitled to any of his military retirement benefits?”

Rick: “Yeah, that’s kind of the magic number. Anything greater than ten years is going to give you the end-roads or share of his military benefits.”

Related ReadingSocial Security and Divorce

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