Separating The Family Home With Clarity

It is widely accepted that two primary catalysts leading to divorce between married couples are a lack of communication and financial duress. Even after seeking and applying proper counseling and therapy, divorce may be the only logical solution for couples undergoing such stressful times. It is especially crucial that ensuring proper communication and emphasizing diligent financial awareness are so critical during the divorce process. For it is very easy for the house and home -which you both fought so hard for- to crumble like a house of cards if the proceedings are not handled properly.

When a couple first purchases a home together there is no doubt that love, hope and dreams are emblazoned into the very essence of the walls within. If it was a couples' first home then it was probably a "Starter Home" and growing equity in the property over time was of utmost concern. If the divorcing couple had already obtained their "Dream Home" then children, family events and the plans for retirement had likely already been drafted and secured. Either way the home belonging to the couple has great value and the future of it must be steered wisely.

Anger, guilt and sorrow often prompt people to make quick and reckless judgments. Many times divorcing couples decide to sell their home and split the equity within it, rather than hold onto it and bear the painful memories of broken dreams. More times than not though, these same people regret this decision a year or two down the road, upon realization that all of their hard earned equity was lost through the cost of the sale or (even worse) that any future potential equity has been eliminated. When children are added to the equation, it is even more important to act rationally, so as to assure that a proper legacy or estate is drawn up to pass property onto heirs.

The individual finances of the divorcing couple should be evaluated to ascertain if either party can financially bear the cost of home ownership on their own. If it is possible, then an overall future outlook of the projected appreciation in the home, neighborhood growth and family needs (e.g. school, church, medical, etc.); should be estimated to determine if the home is indeed a good investment. If all things are considered and points towards one party keeping the home, then a refinance to liquidate equity and buy out the other party's share would indeed be prudent. If not, then a sale of the home may be the only viable option.

The need for divorcing couples to thoroughly and properly evaluate their individual finances, and weigh the true value of home ownership cannot be stressed enough. By doing this, both parties can be assured that all decisions have been based upon logic, reason and financial clarity rather than stemming from emotional attachments. Failing to do so may unfortunately result in years of even more regret and sorrow than is truly necessary, due to the loss of hard earned investment equity and future plans of leaving a legacy for your children. After all, nothing is worse than realizing that you may have caused yourself even more financial duress due to a lack of communication when those may have been the very reasons for the divorce in the first place.

Written by Scott Yonehiro, CMPS