For many divorcing spouses, the family home represents the most valuable asset in the estate. It may also be separate property if it was owned by one spouse prior to the marriage. Any increase in the value of that separate property during the marriage becomes divisible and falls under the category of marital property. That is all well and good – but what happens when there is a financial incentive to decrease the value of a family home?
When Might a Spouse Want to Decrease the Value of a Family Home?
A spouse might want to decrease the value of a family home if it is their separate property. For example, they might have purchased a home for $50,000 at the start of the marriage. Over the course of decades of marriage, the home may rise to a value of $100,000. Since this net increase in value is divisible, the spouse who owns the home may need to part with roughly $25,000 of its value in the event of a divorce. While it may be possible to sell the home and split the proceeds accordingly, spouses may also wish to buy each other out. In other words, the spouse who owns the house might offer their ex a cash payment of $25,000 in order to keep the home.
This all depends on the market value of the home. In order to make sure these sums are accurate, spouses may wish to have their homes appraised. But what happens if the spouse who owns the home intentionally decreases the value of the property before the appraiser arrives? What if the appraiser arrives to find serious issues with the home, pushing the market value all the way back down to $50,000? In this case, the $25,000 buyout would no longer be necessary – and there is, therefore, a real financial incentive for this behavior.
How Might a Spouse Decrease the Value of a Family Home?
There are many ways in which a spouse might intentionally decrease the value of their own home. Some may be more effective than others, and the spouse who carries out this misconduct would likely face consequences if their self-damaging behavior becomes too obvious. For example, a spouse who starts hacking apart the walls with an axe would likely face consequences for willful dissipation of assets. This is a serious form of financial misconduct in a divorce, and the strategy could completely backfire on them.
Whether the goal was to decrease the family home’s value or not, similar behavior occurred in the celebrity divorce of Teen Mom reality TV stars Mackenzie and Ryan Edwards. In 2023, Ryan allegedly scrawled various slurs and insults across the walls of their family home. He also reportedly broke a number of children’s toys. Photos from the home suggest that it was completely trashed, and serious damage obviously occurred. If this was a strategy to decrease the value of the family home before an appraisal, it was far too obvious.
A more subtle strategy would be far more effective. For example, a spouse might dump toxic waste in the soil in the dead of night and then request that the appraiser carry out an environmental test. They might also spread rumors about the home or ensure that there are liens on the property prior to the appraisal. As long as these issues can be resolved relatively easily after the appraisal, the strategy could potentially save the spouse thousands – or even millions – of dollars. It goes without saying that this would also be unlawful.
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