During a divorce, a couple must confront many hard decisions, not the least of which is the sale of their marital home. Reaching a decision whether to sell the marital home contains emotional, tax, and financial consequences. Consequently, you must consider your overall situation (now and in the future), consult with any experts which you may need to provide you objective advice about the financial and tax consequences that may result from a sale of the home.
In making the final decision as to whether to keep or sell your home during the course of a Florida divorce, keep in mind the following issues:
- Is your marital home a good fit for the new “single” you? Did you originally choose the location because it was convenient to your spouse’s business and travel? Did you seek out a certain house design and size because it was conducive to entertaining his or her business associates? Maybe this design is now excessive and unnecessary. Are the children you raisedin the home grown and living on their own? It is important to sort through and separate what you need from a home in the past versus what you may need for living quarters now and in the future;
- What are your housing options where you live? Will the cost of your rental or home payments for a new residence be about the same, more, or less than for the home in which you are currently residing? Are rentals available where you live that meet your needs and are in the same school district? Can you afford the cost associated with moving and/or storing items if you move into a smaller home?
- What’s the cost of keeping your current home? Along with the mortgage payments, you’ll also have to pay for taxes, utilities, seasonal maintenance, monthly service contracts, and potentially additional expenses to manage the property. Costs like these can add up and become a significant addition to your monthly expenses. You’ll also have to consider repairs and renovation. Such future expenses may be an unnecessary drain on your financial resources.
- What will you have to give up in order to keep the marital home? If you’re keeping a significant asset such as the marital home at the end of a divorce, it often calls for some kind of significant financial trade-off. In other words, your spouse will be permitted to keep marital assets of equal value in exchange for the house. Make sure that by keeping the house you’re not rendering yourself cash or asset poor in the future;
- Could you be better off taking other assets in exchange for your share of the family home? If you decide to keep the house now and sell it later on your own, will you end up with a capital gains tax bill? It’s smart to meet with a tax accountant or Certified Divorce Financial Analyst (CDFA) to figure out the various tax consequences that could result from selling or trading the marital home during the course of the divorce, keeping the house, or trading other assets for the house during your divorce.
- Consider the benefits of making a clean break by selling the marital home. You can use your share from the profit from a sale of the home to prioritize your new financial goals. You also won’t be experiencing unpleasant or upsetting emotional flashbacks in the kitchen one night, remembering that terrible fight you had. Once you are out from under the weighty constraints of the mortgage on your marital residence, you can downsize, buy a fixer-upper, try a new floor plan or move into a new community where you and only you now have the keys to unlock your new front door.
Each case is different. Everyone’s priorities are different. However, by answering the above questions honestly, an individual in a contested divorce should be able to come to a better understanding as to whether it’s in his or her best interest to keep or sell their home during their divorce.
For more than 25 years, Charles D. Jamieson, a Board Certified Family and Marital Law Attorney in West Palm Beach, has assisted clients in protecting their families and assets during the chaos and upheaval in their divorces. To schedule a consultation or learn more about his firm, visit his website at: http://www.cjamiesonlaw.com.