For a lot of divorcing people, keeping the family home is often seen as a “win.” That may be especially true if they’ve been in the home for many years, raised their children there and have close ties to the neighborhood or community.
Is keeping the home really what’s best? If you’re divorcing in your 50s or later (what’s often called “gray divorce”), you may have deep emotional ties to your home. However, that shouldn’t cloud your thinking about whether staying in it is a smart financial decision at this point in your life.
Even if the mortgage is paid off, there are property taxes, insurance, utilities and maintenance costs to consider. According to one certified divorce financial analyst, “If a home is going to be more than 70 percent of your net worth, you should consider whether you can really afford it.”
Getting a fair deal if you part with the home
If you and your spouse are both happy to give it up, you can sell it and split the proceeds. If your spouse wants to keep it, you can work out an agreement in the divorce where they buy your share or give you something of equivalent value. It’s critical to keep in mind that Texas is a community property state.
If your spouse does keep the home, it’s crucial to take your name off the deed so you don’t end up with any unexpected liabilities. Whatever you do with the home, it’s also critical to ensure that you know the property’s current fair market value (FMV) to ensure that you’re getting a fair deal.
This isn’t to say that you shouldn’t seek to keep your home if that’s what is best for you. However, it’s important to make sure that’s what’s best financially as you become single again at this point in your life. By having experienced legal guidance as well as possibly consulting with financial, tax and real estate professionals, you can better ensure that you’re making practical decisions during what can be a highly emotional process.