Home may be where the heart is, and that is why it is often one of the most sought-after assets when a couple is divorcing. Some people in Colorado may see the family home as their ticket towards securing much-needed finances once they retire. However, is it always worth it to pursue the family home during the property division process?
According to a new study conducted by Boston College’s Center for Retirement Research, divorced women who own a home were more financially secure than women who had never been married. However, this study concerns some professionals, who believe that “winning” the family home is not the best financial move for every divorcing woman, especially if other major assets are available in the property division process. These professionals state that retaining the family home can be costly after divorce, as renovations, property taxes and capital gains taxes all must be paid solely by the homeowner, instead of by both parties.
There is also a caveat according to some professionals. Whether a person seeks to retain the family home or seeks to retain a different major asset in a divorce, what is important is that that person commits to keeping the asset intact so that they can tap into that asset when it comes time to retire. For some, this is easier to do with the family home, as a house is a single, illiquid piece of property. People who retain a retirement account in lieu of the family home may be tempted to use some of those assets to pay for other costs, since as a person they may find their household income is lower now that they are single, rather than married.
So, in the end, deciding whether to pursue the family home in the property division process is a very personal decision that will vary based on one’s financial circumstances. Some people are financially able to cope with the expenses associated with homeownership and are able to use the home to fund their retirement when the time comes. Other people may find that they are unable to afford living in the family home post-divorce and are better off pursuing other high-value assets. Every person’s situation is unique, so it is important to take a close look at the legal implications that follow the property division process in order to secure a solid financial footing once the divorce is final.