One of the biggest decisions couples make in a divorce is what to do with their home. There's no one right or wrong decision that's best for every couple.
Some decide to sell it right away and split the proceeds. One spouse may buy out the other and keep ii or ask for the house in exchange for a reduction in spousal and/or child support.
Others decide that one spouse — usually the one with primary custody of the kids — will keep it, at least for awhile, and both contribute to the mortgage, taxes and maintenance costs.
Financial, legal and real estate experts disagree on the wisdom of keeping the house. One family law attorney who's also a real estate broker says, "Divorce itself is enough of a burden without adding real estate in to it." However, she adds, "There's nothing worse than trying to start over after a divorce in the same house you and your ex lived in."
There are numerous good reasons to sell the house during the divorce, particularly if there's a good chance you'll sell it anyway as an empty-nester.
It's usually financially wiser to sell and share the sale's costs and profits. Otherwise, on spouse has to buy out the other and unload it on the market at some future point. Divorcing spouses also face less of a tax burden if they sell the house as a couple than as an individual.
Further, many people don't fully realize just how much work and money is involved in maintaining a home. One certified financial planner notes that many spouses who negotiate to get the home in lieu of larger support payments "find themselves house-rich and cash-poor once child support and alimony run out." That's particularly true if the person remaining in the home is relying on this support.
Decisions around what to do with the family home are often highly emotional, as well as crucial to your financial well-being going forward. That's why it's essential to seek the advice of your Rhode Island family law attorney as well as financial, tax and real estate professionals who can help you evaluate your options with a clear head.
Source: U.S. News and World Report, "Divorcing? Should You Divorce Your Home, Too?," Geoff Williams, Oct. 11, 2017