Many different decisions must be made when you are going through a divorce. One of these is what you are going to do with the marital home.
There are four options for this:
- Sell the home before the divorce
- Sell the home during the divorce
- One person buy out the other person's share
- Sell the home after the divorce
The decision about which of these is right for your case might not be easy. There are some specific benefits to each of these, but there are also drawbacks. Thinking about these might help you determine what to do.
If you decide to sell the marital home, you have to remember that you and your ex won't split everything made on the sale if you have a mortgage on the home. You will have to pay off the mortgage company and then you will be able to divide up the remaining funds.
When one spouse decides to buy the other spouse out of the home, this doesn't mean that cash will be exchanged. Oftentimes, this is done as part of the property division settlement, which means that one party might just get more of the other assets or the person who gets the home will be liable for more of the debt.
Some people choose to allow the parent who will have the children more to remain in the home. If this is you, make sure that you can handle the upkeep of the home so that you aren't stressed each month about how to pay the bills.
No matter what option is the best one for your case, make sure that you take the time to consider the tax implications. Capital gains is something that might sway your decision about what to do. Once you know what is going to happen, you can start to make other plans.
Source: Our Family Wizard, "Selling a Home During Divorce: What to Consider," accessed Oct. 26, 2017