Should you keep the marital residence or sell it?

In many divorces, property division is a technical and involved process that requires careful cataloging, assessment and appraisal of assets. The goal, under New Jersey law, is to ensure that both spouses receive an equitable distribution (but not always equal distribution) of the marital assets.

If you’re about to go through the property division process, you have likely thought about the marital residence, which is often the largest asset that couples own. You may even have your sights set on keeping it after the divorce, if at all possible. In today’s post, we’ll discuss some factors to bear in mind before you decide to advocate for ownership of the family home.

What would you be willing to trade away instead?

The only easy way to divvy up the marital residence would be to sell it and split the proceeds. But if you want to keep it, you must be willing to give your spouse the equivalent value of his or her interest in the house. You must ask: What other assets would you be giving up, and can you afford to do without them?

It may not be wise to sacrifice retirement savings because you’d be putting your future in jeopardy. You also may not want to give up too many of your current liquid assets if it means immediate financial difficulty for you and your children.

If you can afford to lose the other assets, it may be worth it to keep the home. But this decision requires careful analysis.

Can you afford the total costs of the house by yourself?

Making a mortgage payment in a dual-income household is much easier than making the same payment on a single income. Moreover, many people fail to account for the other costs associated with home ownership, including:

  • Property taxes
  • Monthly costs of all utilities
  • Necessary and emergency repairs
  • Upgrades and improvements
  • Homeowners insurance
  • Maintenance and replacement of household appliances

If you have a modest-sized house or a very generous personal income, you may be able to afford these costs on your own. If not, you may need to sell the home and find a new place to live.

Final thoughts

It is common to want to keep the house in divorce – especially if you have children that you don’t want to uproot. But although the house may have a lot of practical and sentimental value, your decision to keep or sell it needs to be based on strict financial calculations and consultation with your family law attorney.