People often give well-intentioned but misleading advice during a divorce. One person might tell another that they need to start a secret bank account using marital income so that they have money in their own name when they file. A spouse who follows that advice might eventually face allegations of hiding assets or misrepresenting their finances if they do not disclose the account during the divorce.
Another common piece of advice that people give is that a spouse should not leave the marital home during divorce, as doing so puts them at risk of losing their share of home equity. People may feel trapped in an untenable situation where they must live with their spouse despite going through an intense, acrimonious divorce.
Is it true that moving out ensures the other spouse receives all of the home equity in a divorce?
Moving out does not mean abandoning the home
Contrary to what people sometimes claim, leaving the marital home does not sever one spouse’s interest in the property. They have likely spent years making payments on the property and performing maintenance.
Those investments do not simply disappear because they move out to limit conflict during the divorce. Under equitable distribution rules, even someone who does not wish to live in the marital home still has an interest in a fair portion of the accumulated home equity.
Abandonment of the home occurs when one spouse ceases helping to maintain the home and cover its expenses. Even in cases where one spouse can claim that the other abandoned the marital home, those allegations do not automatically sever the other spouse’s interest in the property. Instead, it may simply reduce how much of the equity they can expect to receive as the divorce progresses.
Some people can even regain possession of the marital home at the end of property division proceedings although they left during the divorce to keep the peace. People who understand the nuances of equitable distribution proceedings can make choices that work for them during the divorce while simultaneously fighting for an appropriate property division settlement.
Discussing marital circumstances can help people develop a strategy as they proceed with divorce and prepare for property division. Home equity is a valuable asset that spouses generally do not wish to sacrifice for more comfortable living arrangements during a divorce.