Divorce and the Matrimonial Home

When divorcing, the topic of what to do with the matrimonial home almost always arises. Judy Byle-Jones, CFP, CLU, CH.F.C and author of A Woman’s Road to Riches, is a certified financial planner who specializes in helping women reach financial security before, during and after divorce.

How should we deal with the matrimonial home?

In a divorce, one party keeping the matrimonial home is not always a wise decision. First of all is it may be too expensive to maintain. In some situations downsizing makes more sense for your budget and allows for a fresh start emotionally.

Selling the home and dividing the proceeds is the easiest and cleanest way of dividing the equity in the home. Concerns that need to be addressed include the possible capital gains, buying another home compared to. renting, and being able to qualify for a new mortgage.

One spouse can buy the other out. has some difficulties.

1. The market value of the home needs to be agreed upon.

2. The home may need to be refinanced to pay off the spouse, if one decides to stay in the home.

3. If there is a mortgage on a home, one or both spouses may remain liable even though title has changed.

A third option is that both parties can hold it jointly for a set number of years, particularly if there are dependant children involved. This is an option for couples that want their children to remain in the home until completion of their education or upon reaching a certain age. The resident’s ex-spouse would make the mortgage payments, while other costs related to the maintenance and taxes could be split evenly. This creates a tie between the ex-spouses, and for some may create stress.

Note: A matrimonial home can also be a principal residence. Some couples have multiple matrimonial homes, but one property can be designated as their principal residence, and can be sold without incurring any tax on Capital Gains.

by Editor

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[Tags: divorce, financial planning, matrimonial home]

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