What happens to the house, and the monies used to buy the house, in case of a divorce? As 40% of all first marriages and 60% of all second marriages end in divorce - there is a 50/50 chance of the marriage failing. As such, it is worthwhile to spend a few minutes considering how best to protect your largest asset, the house.

Marriage is an economic partnership. Normally any asset acquired during the marriage, measured from the day you get married until the day one party files a Summons for Divorce, is considered marital property. In a divorce the Supreme Court Judge will equitably distribute marital property.

Property which the Court does not distribute to the other spouse is called separate property. Separate property is your monies that you had prior to the marriage, which you maintained in an account solely in your name. Separate property is also monies you received from an inheritance or gifts solely to you.

In the context of purchasing a home, sometimes the husband or wife will use their own separate savings to purchase the house. Sometimes, a parent of the husband or wife will gift or loan money to you to buy the home. Normally it is a gift if the marriage works out. If not, the parents call it a loan and want to be repaid.

It is very important to paper trail and trace these funds, the separate property, family gifts (which converted to a family loan), in case there is a divorce. When the house is sold in the divorce action, the separate property, if properly documented, will return to the party who made that contribution.

In a divorce, a number of issues concern the house such as:

With respect to who can live there during the divorce - the simple answer is both parties have a right to live there. Only if a Court issues an order awarding one party sole and exclusive possession or if a temporary order of protection is issued directing one party to stay from the house, does one spouse get to live in the house alone.

With respect to paying the mortgage, history normally dictates the future. If the husband was paying it before the divorce, the court will want him to continue to pay it, to preserve the marital asset, before the house is sold. With the new temporary maintenance statute enacted last year, the monied spouse may be the party ordered to pay the mortgage. With respect to when the house is sold, that is based upon a number of variables including:

If you buy the house, normally title is in husband and wife, tenants by the entireties. You could have title just as joint tenants. You may, due to one party's credit rating not being so great, buy the house in only one person's name. What happens if the house is solely in the wife's name and the parties then get divorced? Has the husband lost the house? Thankfully no. New York State does not look just at the title of the house, but looks at when the house was purchased.

If the house was purchased after the parties were married, and marital funds were used to buy the house, the house is marital property and each party has an equitable interest in the property.