Divorce: Who Keeps the House?
Many women start divorce proceedings unprepared for the emotional rollercoaster surrounding the marital home.
Often, it starts as an internal struggle. After all, most women fully expect to keep their house. To them, it represents a place of comfort that will provide solace during, and after, a time of great uncertainty.
But at times, the marital house can be just the opposite. It can serve as a painful reminder of all that went wrong with the marriage.
Mix in the feelings (and opinions) of a husband and children (not to mention the fact that the marital residence is typically a couple’s largest asset), and it’s easy to understand how a single piece of real estate can ignite a contentious tug-of-war.
Despite all these emotions, however, every woman must answer the question “Should I keep the house?” based on practical financial reasons. Part of our job at Bedrock Divorce Advisors is to complete the financial analyses and projections needed to help a woman understand if she can afford to do so, and if so, for how long.
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Are you trying to decide whether or not you should keep your marital residence? If so, here are four key questions you need to consider:
1. Is your marital home a good fit for the new “single” you?
Perhaps the house you’re living in now was purchased with the needs of others in mind. Did you choose the location because it was convenient for your husband’s business and travel? Are the children you raised in the home grown and living on their own? This could be the right time to downsize and find a place that better suits your life now. It’s important to sort through and separate what you needed from a home in the past vs. what you need now and in the future.
2. What is the current value of the house?
Because the marital home is often one of a couple’s largest assets, an unbiased third party real estate appraiser can be an integral member of your divorce team. An appraiser will calculate the market value of the house by comparing it to homes recently sold and those that are currently on the market. Ideally, these comparable houses are in close proximity to your home and have similar square footage, acreage and amenities. Using this information, the appraiser will present an accurate selling price in the current competitive market. The appraiser’s report could feature prominently in divorce negotiations whether or not you decide to keep the house.
3. What is the cost of keeping the house?
Along with mortgage payments, you’ll also have to pay for taxes, utilities, seasonal maintenance, monthly service contracts and perhaps even additional staff to manage the property. Costs like these can add up to become a significant addition to your monthly expenses. You’ll also have to consider looming repairs and renovations. While projects like these may add value to the home, they could also prove to be a further financial drain on your resources.
4. What will you have to give up in order to keep the house?
Often keeping the marital residence is a tradeoff, rather than an exchange of cash. In other words, your spouse will keep something that is presented to be of equal value in exchange for the house. If you are concerned about hidden income/assets/liabilities, the possible dissipation of marital assets and/or the value of any item that’s under negotiation, you may need to add a forensic accountant and/or a valuation expert to your divorce team. They can determine the true worth of a business, professional practice or other asset with a keen eye for any misrepresentations that could skew that figure. The valuation expert can also establish the value of stock options (and/or restricted stock, etc.) and intangibles such as an advanced degree or training to help ensure that you do not unwittingly give up something of inequitable current or future value in exchange for the house.
Choosing whether or not to keep your marital residence may be one of the most difficult decisions you have to make during your divorce. Give yourself the time to think it through carefully, and remember: Think Financially, Not Emotionally®. You need to strategically manage your assets and develop a sound, comprehensive plan for financial stability and security in the future.
All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.
Jeffrey A. Landers, CDFA™ is a Divorce Financial Strategist™ and the founder of Bedrock Divorce Advisors, LLC, a firm which advises women throughout the United States before, during and after divorce on dividing marital assets and negotiating favorable settlements. He writes for Forbes.com, the Huffington Post and other publications. For further information go to http://www.BedrockDivorce.