A spouse should consider the couple's house, like other property and marital assets, as something that they may have to lose in their divorce. For tax and other financial reasons, the apparent financial value of the house and emotional attachments, may be misleading.
The spouse should first consider the value of selling the property as part of the divorce settlement. Selling or keeping the property have separate tax consequences.
Selling the property could develop cash for redeveloping similar and less expensive real estate that can provide future financial support or a place to live. If the spouse has limited experience in real estate development or other financial assets, they should seek a more experienced partner. However, it is very important to find a reputable and qualified partner to help prevent an unsuccessful venture that can wipe away years of work and investment.
During the end of the marriage, a spouse should calculate the couple's real estate, investment accounts, 401(k) plans, and pensions. Cash, art, vehicles and other assets should also be reviewed. The house may be part of a trade for these assets.
The spouse should determine the account of income that any investment property can create and whether their ex-spouse will have to pay alimony or child support. A spouse who was married for at least 10 years qualifies for their ex-spouse's share of Social Security benefits at 62-years-old. These benefits are higher when the spouse reaches 70-years-old.
After calculating these assets, the spouse may conclude whether there are financial advantages to keep their assets on hand instead of estimating the home's value. Estimating its value is difficult and often subjective and spouses often have different emotional attachment to it.
If the house is over-valued, it can have serious consequences for the spouse who keeps it after the divorce settlement. It can become a financial drain if it needs maintenance or has other expenses. Also, fighting over keeping this property can add litigation costs and times that take away from making other investments.
An attorney can help a spouse calculate the value of their assets and consider financial options. Their representation can help assure that there is a divorce decree that meets their financial needs.
Source: The Washington Post, "Consider your options carefully when weighing whether to keep or sell your home in a divorce," By Ilyce Glink and Samuel J Tamkin, Sept. 25