On difficult decision that many people face during a divorce relates to deciding what to do with the marital home.
The judge has three basic decisions available, which include: 1) Wife buys out Husband’s interest in the home; 2) Husband buys out Wife’s interest in the home; or 3) Sell the home and divide any remaining net sales proceeds.
The decision to stay in the home must be fully considered. Often the home was purchased with a large mortgage, which mortgage was only qualified for based upon a two income household. In such cases, neither parent along has the ability to qualify to refinance the home, or to buy out the other person’s interest. This then leads to option 3, selling the home and dividing the proceeds.
Even if affordable, a person may determine that they are better off down-sizing as a result of the divorce. Similarly, if the home is upside-down, fighting to keep this asset (which is really just debt) may be financially backwards.
A benefit to keeping the home occurs when children (often teenage children) prefer to stay with the parent that remains in the marital residence. In reality, these teenagers may not be selecting one parent over the other, but rather selecting to remain close to their friends, school, extracurricular activities, etc. Similarly, often it may be difficult to find a rental or other replacement home within the same school district.
In some cases, if the other party wants the house, it may be advantageous to allow them to have the house in exchange for other assets such as retirement accounts, which may be more beneficial in the long term.
While leaving the marital residence behind may be emotionally difficult, sometimes doing so allows for a more complete fresh start and financial clean slate. Emotionally, leaving behind a home with shared memories may allow a person to heal and move their lives forward after a contentious divorce.
There is no one-size fits all answer, and in each divorce case the question as to what to do with the marital home must be fully considered. An experienced family law attorney can help you in evaluating the pros and cons related to such a complex decision.