Should I Keep or Sell the Marital Home in Divorce?
The marital home is often the most significant financial investment in marriage, and in all but the very shortest of marriages, there will usually be some equity to divide. That said, the marital home also tends to be the asset to which people are emotionally attached the most.
For this reason, it is common for one spouse to consider keeping the house in their divorce, even fighting for it, despite that choice not being the best one for them financially and emotionally. Usually, that is because they haven’t thought the decision through and whether it makes sense for them now as well as in the future.
If you are struggling with whether to keep the marital home in your divorce, stop and take a breath. Then take the following three steps before deciding.
1. Determine whether you can afford to keep the house.
In general, the court will order that a house is sold absent an agreement between the parties on a buyout. When spouses agree that one of them will keep the house in the divorce, the party keeping it should make sure that they will be able to afford the buyout, new mortgage payment if there will be a refinance, and future carrying costs of the home, including real estate taxes, insurance, utilities, and repairs, on their own.
When there is a buyout, one spouse pays off the other spouse’s share with cash or via an asset offset. The spouse who is bought out has their name removed from the deed and mortgage. Most lawyers will only recommend this option if the buyer has a more than sufficient amount of funds and assets with which to execute the buyout and support its upkeep.
If you want to keep the house but cannot afford to buy it from your spouse, selling it during the divorce process might be your best if not only option. However, that could raise other issues. For example, the timing of the sale might not be opportune. It is possible for the house to have depreciated in value due to the length of ownership and the current market, especially if you haven’t owned the home for a long time. Conversely, the house may have appreciated in value so much that you would be obligated to pay capital gains tax, something you might not be ready to offset in the necessary timeframe following the sale.
Should you decide to put off the sale of the home due to the above concerns or others, such as waiting for children to graduate from a particular grade or school, one way to go about it is to keep your name and your spouse’s names on the deed and mortgage. This would mean both of you would continue to be financially responsible for paying the mortgage and real estate taxes, among other expenses you each negotiated to pay.
However, this option, too, can be risky, especially if you cannot afford to support the house by yourself. For instance, if your spouse becomes unable to pay their share for whatever reason, you would still be responsible for their payments. Such a scenario could mean that you have to move out sooner than you would have liked and at a time not convenient for you.
And these arrangements to pay the house jointly for awhile are typically — and should be — for only a short amount of time. One of the primary goals in divorce is to separate the parties financially to the extent possible. Therefore, with the exception of child support, judges prefer to avoid joint financial obligations.
Bottom line? Take your calculations seriously and ask yourself “What if…?”
2. Detach Emotionally.
When deciding whether to keep the house in your divorce, it is important to make a concerted effort to detach yourself emotionally and analyze the numbers objectively. If you are unsure of what factors to look at or how to find information relevant to your calculations, our legal team can help you pinpoint what you need and obtain it. In addition, we have forensic accountants we know and trust ready to assist. Forensic accountants are for more than
doing business valuations.
Keep in mind that although continuity and minimizing disruption are important for children during and after a divorce, these considerations shouldn’t serve as excuses for putting yourself in a bad financial position. You being anxious about money after the fact will only create the environment you originally sought to avoid by keeping the marital home.
If you are still having difficulty disassociating yourself emotionally from the marital home, consider why you want so badly to keep it. Ask yourself the following questions:
- 1. Am I attempting to preserve the memory of my marriage by keeping the house?
- 2. Am I keeping the marital home because I am waiting for my spouse to come back?
- 3. Am I trying to punish or anger my spouse by keeping the house?
If you answered yes to any of these questions, your reasons for keeping the home can only serve to hurt you emotionally and, therefore, financially. This is because motions are intrinsically related to finances.
3. Err on the side of caution.
Dividing your assets between you and your spouse can leave you with fewer funds and, accordingly, less freedom to spend the way you did while you were married. In addition, getting a divorce can become a significant source of stress, heartbreak, and anxiety.
Having your finances in order can offer you some peace of mind during a period of uncertainty. So, too, can a commitment to cautionary spending. Cautionary spending might very well include making the choice to sell the marital home during your divorce in favor of a more economical option.
Although it might feel constricting in the short term, conserving your money now can be freeing in the future. By being conservative about spending today, you might be able to better allocate funds toward building a new life for yourself and your family post-divorce. This new life might include going back to school, becoming certified in a specific trade, or purchasing a new home where you and your children (if you have them) can make a fresh start.
Remember, in the same way that a house is not necessarily a home, a home need not be linked to a particular house. Where you are and what you make of your space is home.
Contact a Massachusetts divorce lawyer to help you decide if you should keep or sell the marital home.
At Farias Family Law, our goal is to see all of our divorce clients begin their post-divorce lives with a solid foundation beneath them. Where you lived during your marriage is often a significant part of this process.
Our team of empathetic family law attorneys understands how emotionally charged deciding whether to keep or sell the marital home can be. It is why we approach this analysis with the utmost care; we want to give you all the information you need to make an informed decision for both the short and long term. To discuss your specific situation with an experienced Massachusetts family law attorney, call our office today.
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