Arriving at an equitable property division arrangement is one of the most challenging aspects of a divorce. Many couples end up fighting because one spouse’s opinion of acceptable is miles away from the other’s.
Working out what to do with your home can be a particular challenge, and emotions can get in the way of financial logic.
Keeping the house may not be the win it seems
You need to consider the financial cost of owning the home before deciding you want to keep it. If it has a vast outstanding mortgage or is in urgent need of upkeep, it may not be as valuable to you as you think. Here are three options to deal with your home when you divorce:
- One person keeps it: If one of you wants the house, they can buy the other person out or use give them a greater share of other assets in return.
- Share it: Perhaps neither of you needs to sell yet, and you know the property will be worth much more in a few years. If you remain as joint owners, remember that payments could become an issue. If one of you pays the mortgage late, the bank will penalize both your credit scores. If unexpected expenses such as a leaky roof come up, you need to know in advance how you will share costs.
- Sell it: By selling, you free yourself from the reminders of your marriage that your house contains. You also draw a clear line under the property’s value rather than risk problems when one person sells the house for a profit in the future, and the other feels they lost out.
When dividing assets in a divorce, it is crucial not to become too focused on singular items. Your home is just one of many items you own. The essential thing is to get an overall share of assets that you are happy with.