People facing divorce may set a variety of different goals. Sometimes, their main concern is protecting a small business or their retirement savings. Other times, their marital home is their main priority, especially if it is a particularly valuable home in a high-demand neighborhood.
Home equity can represent the biggest shared asset spouses have after years of marriage. People may feel a sense of pride about not just home ownership but of how they have turned space into a home. Sometimes, people decide that their top priority in the divorce is the retention of the marital home. They may tell themselves that keeping the home is tantamount to winning their divorce.
Is trying to keep one’s marital home really the best goal for someone who is preparing for divorce?
Solo homeownership is challenging
There are many practical questions people need to ask themselves when preparing for divorce. One of the first is whether or not they can maintain a house by themselves. Bigger houses with larger yards or pools often require the maintenance efforts of at least two adults or professional services. People need to be realistic when trying to determine whether they can realistically maintain the marital home without the support of a spouse.
Additionally, they need to think about their finances. Not everyone has enough income or a high enough credit score to qualify for a mortgage without a spouse acting as a cosigner. Especially when factoring in the potential need to withdraw equity to compensate the other spouse, keeping the house may not be the most realistic goal.
Neither spouse keeps all the home equity
Retaining any one asset does not make a spouse the winner in their divorce. Property division during divorce is subject to community property rules. In other words, the spouses both have an interest in the marital home, regardless of who earned more and paid more toward the mortgage.
Typically, dividing home equity means providing the other spouse with a portion of the equity or other assets worth a comparable amount. Therefore, people need to spend some time seriously considering whether remaining in the marital home is truly the best path forward after the divorce. Letting their spouse retain possession or agreeing to sell the home can sometimes be better options.
Learning more about property division rules can help people set achievable goals during a divorce. The best way to win a divorce is usually to enjoy a healthy and comfortable life afterward, not to retain specific property.