Dannenbaum Law Firm, PLLC

How keeping the home in a divorce may be beneficial

Women in Virginia may be advised by professionals to resist the temptation to keep the family home after a divorce. According to one study, in some cases, it may be financially beneficial for them to do so. Some women may want to keep the house because it offers greater stability for their children. They may also have a sentimental attachment to the home.

Divorce often means a lower standard of living for people, and that may continue into retirement. The Center for Retirement Research found that in households where there has been a divorce, wealth is around 30 percent lower. People are also 5 percent more likely to run out of assets after divorce. The exception is women who remain single into retirement, and they tend to be in the same place financially as never-married women.

The deciding factor seemed to be whether or not the women kept the home. There can be a significant amount of equity in a home, and it can be an important asset before and after retirement. However, keeping the home can cause financial difficulties for those who cannot afford the additional costs on top of the mortgage. These include taxes, upkeep, and insurance. One financial adviser says she only tells women to keep the home if they can do so for at least five years.

When negotiating property division in a divorce, it is important for people to keep factors like these in mind. Assets that appear to have roughly the same worth may have other costs involved or may have a higher likelihood of appreciating or depreciating in value. The liquidity of an asset may also be a consideration. For example, when looking at the value of a retirement account, people should also understand whether there are taxes or penalties on withdrawals.

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