Untangling decades of shared life is rarely easy, and the emotional turmoil of divorce often intersects with complex financial decisions. Among the most pressing is what to do with the marital home. Should you fight to keep it, consider the benefits of selling or explore downsizing options?
Your housing decision will significantly affect your post-divorce life
When couples split, they may decide to keep or sell the property or downsize altogether. These factors can be crucial during this decision-making process:
- Financial stability
- Emotional attachment
- Maintenance costs
- Tax implications
- Future needs
New York law considers the family home as marital property if acquired during the marriage. This means it is subject to equitable distribution in a divorce. The court will look into 13 factors to determine a fair division.
If you decide to keep the house, you will need to obtain a new mortgage that excludes your ex-spouse as a co-borrower. This process requires proof that you can afford the payments on your own. Remember, you will be solely responsible for property taxes, insurance and maintenance costs.
Selling the house might seem straightforward, but timing can be tricky. The real estate market fluctuates, and you will need to agree on a fair price with your soon-to-be ex-spouse. You will also need to consider potential capital gains taxes on the sale.
Downsizing can be a practical solution, especially if the family home feels too large or expensive after divorce. It allows both parties to start fresh while potentially freeing up capital for retirement.
Divorce decisions require personal, financial and legal insights
As you weigh your options, remember that your financial stability should be a top priority. Factor in both short-term and long-term impacts of your choice and try to make decisions based on practical factors. Seeking professional legal help to face this significant life transition can be advantageous.