You’d really like to keep your home as you get divorced. The whole event feels rather chaotic and upsetting to you, and you feel like having some stability in your living situation will really help you move forward.
But your spouse owns a share of that house. He or she isn’t going to let that go for nothing. Should you give up other assets — bank accounts, investment accounts, retirement accounts, etc — to keep the home?
While it’s tempting and your reasoning makes a certain sort of sense, some experts say that this is one of the biggest financial mistakes you can make during a divorce. The problem is that the values are not actually the same, even if they look like it.
For example, perhaps it’s a house that’s worth $1,000,000. Your spouse owns $500,000 of that. You also have an investment account with $500,000 that was going to go to you. Should you trade them, giving your spouse the account?
The problem is that, in the coming years, your investment account should increase in value. At the same time, you have to pay to maintain your house. You’re giving up something that should earn you money for something that comes with a lot of inherent costs.
Granted, you have to live somewhere, so you can’t avoid all costs. You need to make the decision that is best for you and your family. Just make sure you understand the legal options you have and all of the long-term ramifications of the choices that you make during the property division process.