Your home is more than an asset. It’s an emotional and financial decision that can have a significant impact on your future.
In a military divorce, state law typically controls how property is divided, while federal law, particularly those affecting military benefits, will also influence how some assets are treated. Before deciding who keeps the house, it’s important to consider your entire financial and practical picture.
At Melone Hatley, P.C., our experienced military divorce lawyers help families navigate these decisions every day. Here, we break down what you should consider when deciding who will keep the house in your divorce if one of you is a military service member.
Is the House Automatically Split 50/50 in a Military Divorce?
While it’s a common assumption that marital assets are split evenly in a divorce, that’s rarely how it works.
Property division is determined by the jurisdiction that is handling the divorce. In states that recognize equitable distribution rules, many factors are considered when determining what is a “fair” division of marital property, including assets, income, contributions to the marriage, financial need, and, in a military divorce, division of military benefits. The house is only one part of this equation.
What Assets are Considered When Dividing Marital Property in a Military Divorce?
Marital property is more than just the marital home. Courts look at the entire marital estate when determining property division in a divorce.
In a military divorce, this becomes more nuanced. Military compensation and benefits don’t always look like traditional income or assets, but they can hold significant value, and in some cases, they can be divided or factored into the overall division.
In a military divorce, the division of marital property will consider:
- Real property, such as the marital home
- Bank accounts and other liquid assets
- Retirement accounts and pensions
- Military retirement benefits
- Thrift Savings Plan (TSP)
- Debts and liabilities
- Personal property
Who gets the house in a military divorce will be a part of a larger decision that balances multiple assets and liabilities based on the full circumstances of your case.
What Are Your Options for the Marital Home?
Obviously, physically dividing a home is impossible in a divorce. It then becomes about dividing the value and equity in the home. There are several options for this:
- One spouse keeps the home – This typically involves refinancing the mortgage into one name and compensating the other spouse for their share of the equity.
- Both spouses sell the home and divide the proceeds – Often the most practical solution, it allows for a clean financial break, giving both parties the ability to start fresh.
- Deferred sale arrangements – One spouse remains in the home temporarily – usually for the children’s stability – while the home is sold at a later time.
- Co-ownership after divorce – In some rare cases, both parties retain the home for a period of time with a shared understanding of their responsibilities toward it.
In a military divorce, these options can be even more complicated. Logistics, such as relocation timelines, deployment schedules, and physical distance can make even straightforward options more difficult to implement in practice.
Does Having Children Affect Who Gets the House?
When children are involved, the conversation around who keeps the house also becomes tied to what is in the child’s best interests. Stability becomes one of the court’s central concerns, wanting to minimize disruptions to your child as much as possible.
Courts prioritize continuity for children in a divorce, including staying in the same school and maintaining familiar routines when feasible. Consequently, the parent with primary physical custody may be more likely to remain in the house, especially if it supports the child’s day-to-day stability.
How is On-Base Housing Handled in a Divorce?
If you are living in on-base housing, this is a very different situation from owning a home. There is no mortgage, no equity, and no ownership interest to divide. But it still presents its own challenges in a divorce setting, especially when timing, relocation, and housing transitions all occur simultaneously.
In a military divorce, on-base housing is treated as a benefit tied to the service member’s status, not as marital property. This shapes what will happen next and the options available to you.
- Military housing is typically government-owned or privatized and leased, not owned by the service member. Because there is no ownership interest or equity, it can’t be divided between spouses.
- Eligibility for on-base housing is based on a service member’s active-duty status and dependency status. Once a separation or divorce occurs, eligibility for the non-military spouse will change.
- In most cases, the non-military spouse will need to secure alternative housing, and timing can add to the pressure.
- After a separation or divorce, the service member may receive Basic Allowance for Housing (BAH) to help cover housing costs. This can influence not only where the service member will live post-divorce but also affect child and spousal support calculations.
In other words, on-base housing isn’t something you divide. But because housing changes can happen quickly and involve both legal and practical considerations, it’s important to approach them early with a clear strategy.
Can One Spouse Refinance or Assume Your Existing VA Loan in a Divorce?
If your marital home is financed with a VA loan, these questions become important. While it may seem simple on the surface, with one spouse keeping the home and refinancing or assuming the existing mortgage, with VA loans, there are additional rules and limitations that can impact both spouses after the divorce is finalized.
Refinancing with a VA Loan
If one spouse wants to refinance with a VA loan and keep the home:
- The spouse keeping the home must qualify for the loan independently,
- If that spouse is not eligible for VA benefits, they typically can’t refinance into a VA loan.
- If they are a service member or veteran, they may be able to qualify using their VA entitlement.
Assumption
While a VA loan is assumable, it’s not always the best or simplest option.
- An assumption allows the non-military spouse to take over the existing mortgage, including its interest rate and terms.
- However, the assuming spouse must still be approved by the lender, including a review of their credit and financial stability.
- When the military spouse wants to keep the VA loan independently, this is not considered a loan assumption. Instead, they will need to ask for a release of liability to remove the non-military spouse from the loan. The lender will also need to requalify the service member independently for the loan.
While an assumption can seem appealing in these cases, especially in a higher-interest-rate environment, it comes with some important considerations.
What Happens to the VA Entitlement?
If the non-military spouse assumes a VA loan, the original VA entitlement typically remains tied to that property. This can limit the service member’s ability to use a VA loan again for themselves.
If the eligible service member or veteran spouse wants to keep the home independently, their VA entitlement remains tied to that property. In other words, VA entitlement follows the property and loan, not the individual, in these cases.
Practicalities
Keeping the home must also be financially and practically sustainable for it to make sense. You will need to consider:
- The true cost of home ownership, including mortgage payments, taxes, insurance, maintenance and unexpected repairs
- A potentially larger refinance loan that could increase your monthly payments
- The practicality of maintaining the home solely on your income
- How keeping the home may delay your financial recovery, making it harder to rebuild savings or plan for the future
- Future tax consequences of keeping vs. selling the home
- How a Permanent Change of Station, Temporary Duty, or future deployment could make keeping the home impractical, even if it is affordable
At the end of the day, keeping the home in a military divorce isn’t just about making the numbers work now, but whether it will make sense months or even years from now. In addition, military life brings its own level of unpredictability that can quickly upend your existing circumstances. Considering the full picture, both practical and financial, helps ensure that what you choose is in alignment with where you’re headed next.
Getting the Help of an Experienced Military Divorce Lawyer
Choosing what happens to the home in a military divorce is not as easy as deciding who wants it more. It’s a decision that will need to consider financial and legal implications as well as the unique demands of military life.
At Melone Hatley, P.C., our experienced military divorce attorneys understand the nuances of military divorce and the decisions that come with it. We can help you evaluate your options and move forward with a strategy that truly works for you, both today and tomorrow.
Contact us through our website contact form, call us at 800-479-8124, or schedule a free consultation with one of our Client Services Coordinators. At Melone Hatley, P.C. we are here to be Your Partner in Divorce®, helping you protect what matters most – your family, your finances, and your future.
