Should I Keep the House or Not? Financial Advice for Del Mar Residents Going Through Divorce, PART 2

This four-part article series poses a series of questions to help people going through divorce decide whether it is in their best financial interests to keep the house or to sell it and split the money.

Welcome to the second installment of this four-part article series on whether it’s a good or bad idea to keep the house post-divorce. The answer to this exigent question, of course, varies from person to person and depends on a suite of variables. In Part 1, the first important question financial planners in Del Mar tend to urge divorcing Del Mar residents to consider is what their home meant to them and why it is they would want to hold on to it. Could the benefits and advantages of staying there be found elsewhere? Was the decision made emotionally or because the home really is practical and safe, in a good neighborhood, close to good schools? etc.

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Now let’s take a look at the next important question anyone going through a divorce should ask themselves when considering whether or not to keep the home.

“Should I Keep the House?”

Question # 2: How Long Do You Plan on Staying if You Keep Your Home?

Do you plan on living there indefinitely? Do you wish to leave your family home to your children? Or do you just want to stay there until your kids have finished school and have moved out?

Not surprisingly, how long you plan to stay in your home after divorce can really have a big and important impact upon your decision to keep it or not, according to many Del Mar financial advisors. Many people go through the trouble of refinancing the mortgage after a divorce, which is a very costly process, only to end up moving out once they’ve met someone new perhaps a few years down the line. Selling the house is another issue entirely! You’ve got to get it into sellable condition and then pay real estate agent’s commission and taxes, so ask yourself whether this is all worth it given the period of time you wish to stay there.

While it’s not possible to predict with any certainty what may happen in the future, you can at least decide how long it is you’d like to stay in the home and under what circumstances you’d be tempted to sell. Keeping the house for only a few years and then selling it could see you losing money to the afore-mentioned costs. However, keeping the house for a longer time – perhaps 10 years or more - allows the price to appreciate above the costs of upkeep, taxes and resale, which negates any losses you might incur.

If you don’t want to get involved in any of this from the outset, then liquidating your home during in the process of divorce and splitting it down the middle might be the best bet for you and your ex.

Image courtesy of Free Digital Photos

Stay Tuned for Part 3


Stay tuned for the third installment of this four-part article series to read more financial planning advice on whether Del Mar residents going through divorce should hold on to the house or not. In Part 3, we’ll examine advice surrounding the following two questions:

Does it make sense to continue to own the home jointly with your ex?

If you keep the home, what assets will you have to sacrifice?

Del Mar LPL Financial Advisors Explain The 8 Possible Financial Consequences Of Divorce And How To Avoid Them, PART 3

This four-part article series explains the many financial pitfalls associated with divorce and how women can best avoid them through careful research and the right planning.

Welcome to the third installment of this four-part article series on the possible financial consequences of divorce and what women can do to avoid or at least offset them.

Divorce has a plethora of financial consequences and most of them are bad, especially for women who are said to suffer a 27% drop in their standard of living, while men experience a 10% increase. The reason?

Many women suspend or don't prioritize their careers so that they may care for the family and the home. And so the household relies predominantly on the income provided by the husband. When disaster happens, the fight for financial survival becomes a terrifying prospect for women, especially if she becomes the primary caretaker of the children.

Thankfully, with the right planning and research – and with the help of a good Del Mar financial planner - the stormy seas of divorce aftermath can be tamed to make for smooth financial sailing, so let's continue looking at more, important advice.

Consequences of Divorce # 5: Ignoring Tax Consequences

Every possible financial decision involved in divorce comes with some kind of tax consequence that can actually see you walking away with substantially less than your spouse! Is walking away with a lump sum better than taking monthly alimony? Which asset would you rather have? Is it better to keep the house and live in it, or sell it and split it 50/50? Who pays for what?

What You Should Do

You and your spouse should sit down with an accountant and make all the necessary calculations, making sure that the tax consequences are taken well into account. You may want to apply for an indemnification clause to protect yourself should the IRS come a-knocking. There's always a risk that a past joint tax return wasn't entirely correct and you don't want to be the one who pays the penalty.

Just remember this: Tax can be exceptionally tricky to work out, so unless you have an accounting diploma behind your name, you may want to get a professional involved in helping you and your ex figure this picture out.

Consequences of Divorce # 6: Confusing Money and Emotion

Under ordinary circumstances, it can be really difficult to prevent your emotions from clouding your judgment. Now try to do the same with all the changes and emotional turmoil associated with divorce!

It can be too easy to allow your emotions to drive or change your financial decisions. It can also be tempting to confuse your lawyer with a friend or therapist. A friend doesn't charge you a few hundred dollars an hour to listen to your woes, so keep your appointments short, yet thorough. Make a list of the points you wish to cover and avoid any emotional triggers that might have you breaking down. This way you'll get the most out of your sessions with your Del Mar asset management firm and lawyer and maximize what you get out of every dollar spent on professional advice.

What You Should Do

• Be businesslike in your financial decisions
• Don't allow feelings of anger or guilt motivate you
• Use your friends, family and therapist for emotional support
• Focus on your long-term wealth and wellness
• Try to keep things as professional and amicable as possible. Only lawyers benefit from nasty divorces

Stay Tuned for Part 4

Not fighting for what's rightfully yours and mixing money and emotions… To read some final possible financial consequences of divorce for women, stay tuned for the fourth installment of this four-part article series.