What to Consider Before Keeping the Marital Home in a Divorce

When couples divorce in New York, their home is usually among the assets that must be divided between them. However, either spouse or both may wish to keep the home. This may be driven not only by economic concerns but also by emotional attachment. Whatever the reasons, deciding to keep the home requires consideration of multiple financial and practical factors to determine whether it aligns with your long-term best interests.

If the home is deemed marital property, its equity is subject to the process known as equitable distribution. The house may be sold and the profits divided along with other marital assets in a way that is fair, but not necessarily equal. 

For one spouse to keep the home, the parties must agree to a buyout of the other party’s equity which means paying them their share of the equity, either with cash or in exchange for other marital assets, such as retirement accounts or investments. It’s important to consider whether the house represents your strongest long-term financial option, given ongoing expenses and potential for market fluctuations.

Affordability is a major concern. Mortgage payments, property taxes, homeowners insurance and upkeep will all fall to a single income. There can also be hidden expenses such as repairs or unexpected maintenance costs. Creating a realistic post-divorce budget is essential to determine if you can genuinely sustain the home without sacrificing your financial security.

Refinancing the mortgage under your name alone is usually required if you keep the home, since your former spouse will want to be removed from the loan. Factors like your credit score, income and debt-to-income ratio all impact whether lenders will approve the refinance. If the mortgage remains in both names, both parties remain financially liable, which can complicate finances long term.

Tax implications also matter. Property taxes might increase and future capital gains taxes could arise if you eventually sell the home. Consulting a tax professional before making any decisions is prudent.

If the parties are unable to agree to a buyout, there are limited circumstances in which a Court may award a parent the right to have exclusive use and occupancy of the home for a limited period of time. This typically occurs when you have a child who is close to high school graduation age and has significant ties to the school district and to move them at such an age would not be in the child’s best interests. Typically, this is short term and usually limited to high school students. 

For parents, keeping the home can provide continuity for children, helping them adjust during a turbulent time. Still, if the home’s costs and upkeep are unsustainable, this stability may prove short-lived. Creative solutions, such as nesting arrangements or temporary occupancy, may offer alternatives.

Ultimately, keeping the marital home is a weighty decision that demands emotional honesty and financial clarity. Seek the guidance of financial professionals and discuss your options with your divorce attorney to make the most grounded choice.

The attorneys at Jakubowski, Robertson, Maffei, Goldsmith & Tartaglia, LLP in St. James, New York work with clients across Long Island facing the financial consequences of divorce. To discuss your legal issues and learn how we can help you, call us at 631-360-0400 or contact us online.