Buying a House Before the Divorce Is Final
There are times when a couple that is planning to get divorced spends a period of time legally separated before the actual divorce decree is entered. The spouses often live separately and try to move their lives forward and take certain actions to prepare for their post-divorce lives. One such action is buying a new house. While it is possible for a spouse to buy a new home in Pennsylvania before the divorce is finalized, the spouse has to be careful if he does not want the value of the house being equitably distributed as part of the divorce.
Property that is acquired during the course of a marriage is considered marital property. Marital property is equitably divided in a divorce under Pennsylvania law. Because a couple is still legally married even when the spouses are separated, a house purchased during the separation period may be considered marital property.
If a spouse uses money that is clearly marital property to pay a down payment on a house, the purchased house can be divided as marital property. Even if one spouse contributed to the majority of the couple’s joint savings during marriage, this money is marital property, and cannot be used by one spouse unilaterally without a court order.
When a spouse uses funds that are clearly non-marital property for the down payment on the new house, such as pre-marital savings or an inheritance to the spouse, the house will not likely be divided as marital property. A spouse can also use funds that were earned or saved after the couple was legally separated to buy the house. However, this may be a close call in terms of whether a court will find the money to be marital property. If a separated spouse uses marital funds to further a business that then earns him money, the money is technically earned during separation. However, the spouse used marital funds to earn this money.
Spouses who have non-marital funds should always be careful not to commingle these funds with marital funds. Such co-mingling can happen when a person puts non-marital funds in a bank account that holds marital funds. This co-mingling can change the nature of the funds and if the money is used in a down payment later on, the purchased house can be considered marital property.
It is important to be able to trace the money used to buy a house during separation to non-marital funds. Therefore, if a spouse wants to go ahead and make a major purchase during separation, the spouse should keep clear and accurate records of the funds used and how the money was acquired.
Contact Us for Legal Assistance
If you are planning on making a major purchase while going through a divorce, you should not make the purchase without first speaking to an experienced divorce attorney who is well versed in Pennsylvania law on the division of marital property. Contact an experienced divorce attorney at the Media, Pennsylvania law firm Barbara Flum Stein & Associates serving Delaware County in all family law matters to schedule a consultation.