It is common that one spouse wants to keep the marital home after the divorce, especially when that home has a low mortgage and a low mortgage rate. This article is part 1 of 3 articles discussing the many things to think about other than just the mortgage.


  1. Ownership as tenants in common. In many states, North Carolina being one of them, ownership automatically changes from tenants in the entirety to tenants in common. That means each spouse owns 50% of the house.


    1. If an owner gets remarried and the payment of the mortgage principal is paid with marital property (current income), a third party (a new spouse) may have an interest in the property.

    2. As tenants in the entirety, the home was protected from creditors. As tenants in common, it is not. If there is a lawsuit attributable to one party, that may end with a claim on the house. What if repairs of upgrades are done on the home resulting in a lien on the home? An umbrella policy should be put in place but then these questions arise:


      1. Will parties exchange proof of umbrella insurance annually?

      2. How much coverage will be required to be maintained to cover the house and other assets?

      3. If the house is forfeited in a lawsuit that exceeds the umbrella coverage, will there be any remuneration to the other party and if so, how much?


  2. Beneficiaries of the home if one spouse dies. Here are some things to think about should one spouse die:


    1. If there is a mortgage that is being shared, will the estate of the deceased be required to continue the mortgage payments?

    2. Without planning in the marital settlement agreement, the beneficiary could be a new spouse.

    3. Will both parties name children or the same party as beneficiary of their half of ownership in their estate plans?

    4. Will parties annually exchange proof of beneficiary designation in will/trust?

    5. Do all the agreements that ensue from the marital settlement agreement also apply to when the living spouse and the beneficiary are co-owners?

  3. What are the rules about accessing the home's equity? Will this be allowed?


    1. An agreement should be put in place around access to capital, including repercussions for taking loans against equitywithout the other’s knowledge.

    2. If one party needs liquidity (e.g. a costly health emergency) will there be an agreement to sell or take a lien in such types of events?What parameters will be set? (urgency of care, amount, etc.)

    3. What are the parameters if a loan is allowed?


      1. Up to what amount (e.g. for a HELOC?)

      2. Whose name will be on the loan?

      3. If the loan cannot be repaid, is there any other defined alternative instead of a sale?


    4. Will there be any remuneration to the other party if the house needs to be sold to repay the loan?

  4. Non-related people living in home. It should be expected that the in-home spouse may cohabitate, re-marry or otherwise invite someone to live in the home.


    1. Who will be allowed? Related individuals only?

    2. How will mortgage be paid to prevent the new spouse from having a marital interest In the home?

    3. Do both parties have to agree?

    4. Will there be a limit on the length of time for cohabitation? (short term vs. long term)?

    5. Will there be formal rental of property to any 3rd party tenants? This creates issue with rental laws, including eviction.

    6. Will there be indemnification of the other party if co-habitator damages home or otherwise causes an expense?

    7. Can co-habitation be an intimate partner or not?

    8. Are pets allowed: If so, type, breed, number?

    9. Are caregivers allowed if someone requires extended care for health reasons?