Here's a hypothetical-come-reality that has occurred for many persons involved in divorce proceedings in recent years. One of the now former spouses, either owing to the advice of financial counselors, his or her ex-mate, or simply because of a strong personal desire, opted to retain a house not wholly owned but with equity. In exchange for that, the former spouse surrendered to the other partner an amount deemed fair from one or more of the couple's saving accounts (e.g., retirement account, brokerage account, etc).
Several years have now passed. The savings accounts have more than doubled in value owing to an appreciable market rise, while the home's value has plummeted to a value beneath what the retaining partner had in equity. The result is an "underwater" mortgage for the person, with the other ex-spouse exceedingly happy to have walked away from the property while keeping the investment accounts.
Whether or not to keep the house in a divorce settlement is often a thorny question, with a multitude of considerations to hash through. Property division even for apartment dwellers can be rife with concerns over varied assets, ranging from furniture and jewelry to automobiles and savings vehicles. Where a house is involved, the determination of how to proceed can be rendered far more complex.
"It depends" is one consultant's quick answer as to whether either partner should seek to keep the family home following divorce. That response is necessary and anything but flippant, since a number of questions need to be addressed and answered that concern the home's value, its monthly payments, maintenance expectations, refinancing options and, for many people, the degree of emotional attachment they might have for a home and surrounding neighborhood.
An experienced divorce attorney can help a client identify the relevant considerations involved in whether to keep or part with a home and to dispassionately weigh the options.
Source: Huffington Post, "Keeping the house after divorce," Kathleen B. Connell, Feb. 20, 2013
- We invite readers to visit our Miami, Florida, Property Division page for information on our firm and its strong advocacy of divorce clients with issues focused on division of assets.