Apart from child custody, the marital home is also one of the issues that cause great conflict during divorce. This is probably because most people have strong emotional attachments to their homes. However, you should be careful when fighting for your family home because:
You May Not Be Able To Afford It
The most obvious reason for treading carefully on the issue of the marital house is that you may not be able to afford it. Remember, one of the most common ways of handling the marital home is to share it fairly (here fairly is not the same as 50/50). If you wish to stay in the house, then you may have to buy out your spouse's portion or exchange it with some of your assets.
If it is an expensive house, then you may have to pay a very high price or give out most of your assets to keep the whole house. In the end, you may not remain with enough money to manage your life after the divorce.
It's a Cash Expense
Even if you can afford the house, don't forget that there are other associated ongoing expenditures you will have to meet. For example, you will continue paying the mortgage repayments if you didn't settle them all before the divorce. You also have to pay for the upkeep of the house. This includes paying for gas/electricity, landscaping, housekeeping and repairs, among others. It can be costly if it is a large house on an expansive compound.
All these expenses, however, may pale in comparison to the tax you may owe if you later decide to dispose of the house. According to Divorce Source, if you sell the house for more than $250,000 what you paid for it, then you will owe capital gain taxes.
Homes Have Low Returns on Investment
Lastly, you should know that homes have very low returns on investment. Therefore, if you were thinking of keeping the house as an investment vehicle, then you may not gain much. In fact, there is even a chance that you may gain nothing or even experience negative returns. It all depends on the future state of the economy as well as the demand of houses in your area.
Consider your state's laws and financial strength when deciding whether or not to demand the family home. For example, some states have deferred distribution laws that may allow you sole possession of the house for a limited period if you have young children. The laws, exemptions, caveats can be very confusing, so it is best to consult not only your divorce attorney but also financial experts.Share