‘Who gets the house?’ is often the biggest question in divorce

This article looks at the drawbacks and the advantages of holding onto the house after a divorce.

One of the most complicated issues that arises during divorce is dividing marital property - and perhaps the most difficult asset for most couples to split is the marital home. Unlike other substantial assets, like pensions and investments, the house not only carries significant monetary value, but emotional value as well. That can make it extremely difficult to come to a rational decision concerning the future of the home after a divorce. Below is a look at the advantages and disadvantages of keeping the house - and at alternatives.

When to avoid keeping the house

As Forbes points out, whoever gets the house after a divorce may think they have 'won' since the house, for many couples, is their most valuable asset. However, a house can also be expensive to maintain, especially if the party who owns it now must pay for upkeep and maintenance on one salary rather than two. While keeping the house may be a sound financial decision in some cases, it is important to first work out a budget to ensure that one has the income to actually maintain the house.

As NerdWallet points out, another problem is the potential for negative equity, which happens when one spouse takes over the mortgage only to find that the amount owing on that mortgage is more than what the house is now worth. This problem points to a larger issue with real estate: the fact that the real estate market is volatile and the value of a home can move significantly. Other financial assets, such as pensions and 401(k)s, tend to be much more secure vehicles for long-term financial growth.

When to keep the house

Of course, there are also instances where keeping the house does make a lot of sense. Often, children are a big reason for holding onto the house. By staying at the same address, there is minimal disruption to the children's lives and they will be able to keep going to the same school. For many children, this sense of continuity is exactly what they need during what is otherwise an often difficult and confusing time for them.

Also, there may be a financial incentive to keeping the house. While the real estate market is undeniably fickle at times, it can produce an incredible return on investment in some places. If one's house is in a sought after or up and coming neighborhood, then holding onto it for a few years and selling it once its value increases may make sense.

Family law help

The best course of action during a divorce is to get qualified advice every step of the way. That means talking to a family law attorney about what one's options are. An attorney can advise clients about the long-term implications of their choices and how to go about protecting their best interests when negotiating a divorce settlement.