Starting a family is exciting and often leads to purchasing a larger home. Many special memories are made raising children in the family home but some parents cannot make the magic last and eventually decide to divorce. One of the biggest decisions they must make is whether to keep the family home or sell it during divorce.
Divorce is very disrupting and some people hold onto anything that provides a sense of stability, including the family home. One or both spouses may want the house but only one will receive it. When the spouses disagree about so much, deciding jointly whether to keep the home or sell it may seem impossible. However, many family law attorneys help their divorcing clients reach this compromise.
Financial circumstances may require sale of the home despite the wishes of the spouses. Any money that remains after repaying the mortgage loan and other debts is divided between the spouses according to state law. Each party must then find a new place to live and for the spouse receiving child custody during divorce, this new home must be safe, spacious, and conveniently located to school.
If one spouse receives sole custody in divorce, he or she is usually awarded the family home. This reduces disruption for the children, avoiding the need for them to change schools and activities. Unfortunately, it may be difficult for the custodial parent to afford living in the home on one income even with child support payments. Refinancing the mortgage may be an option but in many cases, the difficult conclusion is to sell the house.
If current finances do permit a divorcing parent to remain in the family home, he or she should consult with a family lawyer and a tax professional before making a decision. Keeping the home and selling it later could result in substantial capital gains tax based on the sales price. It may be financially wiser to give up the share of the house in exchange for other marital assets.
Keeping the house after you win custody during divorce has its benefits but in addition to the drawbacks mentioned above, there may be an emotional reason to sell it. The home was likely the site of some marital disagreements and maybe even a custody fight during divorce. Letting it go eliminates a visual reminder of these unhappy times and provides the opportunity for a fresh start as a single parent.