Should I keep the house in Divore?

One of the most difficult decisions people face when going through a divorce is whether to keep the house.

Parents often want to keep the house to provide stability for the kids. Is it a good idea? It depends.

Pros:

The advantage of keeping the home is you don’t have to move! You save yourself all the time and money associated with finding a new place, packing, and dealing with movers and deposits. You can maintain the routine your home already has. Your children will stay in the same school, near the same neighbors. Minimizing change can reduce the stress of divorce.

You will also protect equity by avoiding realtor fees and closing costs. However, you may want to factor in what the closing costs and fees would be when you determine the equitable buy-out value of the home. Specifically, if the home has $50,000 in equity, you may want to propose that the buy-out equity is $40,000—about what you would actually end up with after selling. Then, you only need to provide your spouse with a $20,000 offset or buy-out instead of a $25,000 buy-out.

Also, gains on your primary residence will be non-taxable income upon the sale of the house, subject to certain limits. That makes the gain on your home more valuable than taxable retirement income.

Cons:

Sometimes children transition more easily when everything changes. Otherwise, one parent is at “home” and the other is “visiting.” Memories associated with the home can make divorce harder, especially when a new boyfriend or girlfriend comes into the picture.

Also, you should analyze whether you can afford to keep the home—not just the house payment, but also costs like landscaping, pool, and utilities. Most often the home was purchased with the understanding that both spouses would participate in the upkeep. You don’t want to find yourself financially strapped or “house-poor” because you’re emotionally attached to the home.

Other alternatives:

“Nesting” is a relatively new trend where the children stay in the home and the parents take turns spending parenting time there. This can work well when the parents are on good terms and the children are close to graduation. If one or both parents travel for work, this arrangement becomes more feasible.

Whether to keep the house may be one of the most difficult decisions you make in your divorce. Consider your options carefully.