Going through a divorce is never an easy time. When you’re separating from a spouse, you’re also separating your life and the life of your family. While it is never easy to start a new life away from your spouse, one of the most difficult parts of going through a divorce is dividing or selling assets that you once shared.
Your marital home can be one of the most difficult things to part with, but it doesn’t always make sense to keep it either. For many individuals going through a divorce, selling the home and splitting the profits is the easiest way to divide the asset. However, many individuals love their home and they aren’t ready to see it taken over by a new family, even after a divorce.
However, if you want to keep your home after a divorce, you will want to know what you’re getting into. Deciding to stay in the home can be an additional struggle or complication for many individuals who were not prepared for the commitment.
If you are struggling to determine if you should sell your home during a divorce, there are a few things you will want to consider.
1. Can you afford it?
The very first thing to consider when determining if you should sell or keep the home during a divorce is whether or not you can afford to continue to live there. If you have a mortgage for the home, are you able to make the payments without the added support of your spouse?
While your home may be a comfort, if you’re going to struggle financially to stay in the house, you may actually be more comfortable if you make a sale.
2. What will you need to sacrifice?
In order to get your ex to remove themselves from ownership of your Myrtle Beach home, you will likely need to make up for the equity in the home that your ex will be losing. This may come from retirement assets or other property that the two of you share.
Before you jump at the opportunity to hand off an asset such as retirement in exchange for the house, think about if you will have time to replace that asset before it is needed. If the exchange is not fair, you may want to consider selling the home.
3. How do you feel in the home?
While the thought of your marriage ending and losing your home may be too much for you to handle at once, think about what living in your home may feel like once your spouse is gone. For some, staying in the home can be a sense of comfort and stability, but others may feel that the home has too many memories.
Take a second to think about the future and what living in the home may feel like without your spouse. If you can’t imagine your children moving and you’re feeling a strong connection to the memories made in that house, you should find a way to stay there. However, if you fear that you may grow uncomfortable in the home, selling it in the divorce can allow you to start your new life without constant reminders of your ex.
4. How long do you plan to stay in the house?
Another item you will want to consider in determining whether or not staying in your home is worth it after a divorce is how long you will want to live there after the divorce. If you and your spouse are divorcing later in life and you believe downsizing to a smaller house once children are grown is in your near future, you may be better off to part with the home now than to wait.
One of the biggest reasons that time is a factor to consider is because you may have the option to refinance your mortgage to remove your ex’s name and get the payments under control. If you have time to refinance your mortgage, you may be able to stay in your house for many years to come.
5. Can you and your spouse continue to hold ownership of the home?
Just because you’re divorcing doesn’t mean that you have to split ownership of the home. If you and your spouse are separating under civil terms, you may be able to hold onto the home until you are ready to leave. This can be a great compromise if you only want to stay in the home for another year or two after the divorce.
Once you decide to move, you and your spouse will split the expenses and profits that come with selling just as you would if you were to sell the home during the time of divorce. However, this option is usually not recommended if you and your spouse struggle to find compromises or work together.
6. Does it make sense for taxes?
Taxes are a complicated process that many of us forget to consider when it comes to buying or selling large items. Unfortunately, selling your home as a couple can provide you with more tax benefits than if you were to sell it individually. When you sell the home independently, you will only be able to exclude $250,000 from taxes.
But if you choose to sell the home as a couple, you can exclude up to $500,000. If this influences taxes you may need to pay, you may want to consider selling the home as a couple instead of staying in the home just to sell it independently in a few years.
Deciding whether or not to keep the family home after a divorce can be one of the most difficult parts of the separation. It takes clear thought and rational thinking to figure out what is best for you. However, when you can answer these questions, you can make an educated decision about whether or not it is right for you.