During divorce proceedings, former spouses must determine how they will divide assets, which often includes the family home. In most cases, spouses either sell the home and split the proceeds or one spouse may buy out the other and retain full ownership. In certain cases, namely those involving children, the usual arrangements may not apply. A Duke order, also referred to as a deferred sale of home order, offers a third option that some families prefer.
How Duke Orders Work
Under a Duke order, two former spouses agree to delay the sale of the home and to allow one of the custodial spouses to exclusively live in and use the home until the agreed time of sale. The deferment typically ends when the minor in the home reaches a certain age. Duke orders minimize the impact of divorce on children. California Family Code § 3800-3810 (the deferment) and §3900 (a child’s best interests) primarily provide the legal basis for the order.
The nickname “Duke order” comes from the first case that upheld a deferred sale of home order in 1980. Today, these arrangements are relatively rare; but they do offer a home ownership alternative when a sale or buy-out may harm a child’s wellbeing. If you have a special needs, handicapped, or emotionally sensitive child, a Duke order may help you maintain a somewhat normal home environment during the transitional period.
Determining Feasibility of a Duke Order
Duke orders create a new financial strain on parents, because both will retain joint-ownership for the duration of the order. In a successful arrangement, parents should retain at least the same equity at the end of the order as at the beginning. If the order would create too many financial hardships, then the arrangement may not serve the parties well.
First, the court must determine if the individuals can maintain the property and its attendant costs through the duration of the order. To ascertain feasibility, the court will evaluate:
- Spousal and child support
- The income of the parent who plans to stay in the house
- All potential funds that may contribute to the maintenance of the property
If the court determines that the parents can manage the arrangement without losing insurance coverage, defaulting on the mortgage, failing to maintain the home, or jeopardizing both parties’ equity, then it will consider the benefits of the order for any minors in the home.
Is a Duke Order in Your Child’s Best Interest?
Since a deferred sale of home order creates an unusual home ownership structure, the family court must also evaluate if the arrangement makes sense for the child or children in the home. To decide, the court will consider many factors including:
- How long a child has lived there
- The child’s school district and grade level
- Proximity to therapy, recreational activities, child care, and other services
- Existing home modifications for children with disabilities
- The emotional state of the child
- Employment considerations that may impact a child’s quality of life
- Tax consequences of the arrangement
The court will look for balance above all when deciding on the viability of a Duke order. To approve the order, the court must see a clear advantage to a deferred sale of home order over alternative home ownership/sales arrangements. Every family is different, and the deciding factors of the order may vary.
Pursuing a Duke Order in Your Divorce
If granted, a Duke order will list the individual responsibilities of each spouse for the duration of the order and the timeframe in which the order will stand. The court does reserve the right to alter Duke orders based on changing life circumstances including remarriage and income level changes.
In divorce proceedings, understanding all the options for dividing assets can help you make the right decisions for your children. Under certain circumstances, Duke orders may offer the best solution for your family during a difficult divorce.