Selling a home is complicated enough. Add divorce to the mix, and you have complete anarchy. There’s perhaps nothing more difficult than dealing with the breakdown of your marriage while also deciding on what to do with your marital properties. When you married your spouse, you don’t automatically think about the end of that union. Instead, you imagine what the future holds for you as an old married couple. In your mind, everything you do and worked hard for is for the family. So, when the marriage starts to break down, it’s even more painful because of all those dreams wasted.
Part of the difficulty of the dissolution of marriage is the division of properties (not to mention the custody of the children if you have any). Your lives are intertwined, so much so that you share your assets and liabilities. The family home is a major hurdle, too. Who gets it? Most ex-coupled might eventually want to sell it because neither can maintain the home on a single income.
Now, the question is whether to sell the home before or after the divorce. For this, you can hire an attorney who specializes in divorce and real estate properties. The lawyer will walk you through the process and explain to you the pros and cons of selling before or after the divorce.
Capital Gains Tax
Being married is a benefit when it comes to the Internal Revenue Services (IRS). The biggest tax break you can get when you sell the property as a married couple is on the capital gains tax. You can exclude up to $500,000 of the home equity from the capital gains tax. When you sell the home after the divorce, you will pay a hefty capital gains tax since you’re technically “single” after the decision is handed down.
Funds for the Future
It’s better to sell the home if you want to take a step forward to your new future. Remember that you are not just ending a marriage, but you’re becoming a single person again. Even with kids, you can pursue further studies, move to a new state, and buy a new (but smaller) place. You need money for these. You have to prepare for your new life. The money you get from the sale of your home can tide you over for the next years. You can also use it to pay for the divorce lawyer.
Delay the Divorce
However, there’s also a drawback when you decide to sell the home before the divorce. It can delay the proceedings. Since you have to wait for the property to be sold, you need to delay filing for divorce. What happens if you want to move on with your life already? Everything you do affects your spouse, too. And remember, the home sale process is no walk in the park when you have to deal with your spouse. It would help if you decided on the price and the agent. You have to prepare the property for sale, too.
It can be a potential battlefield, so choosing to sell the house before the divorce may have unintended consequences. The only way that this becomes practical is if you and your spouse are friendly. If the divorce is amicable, then you can settle this like the adults that you are.
Let Go of the Past
Some say that it’s better for the kids to stay in the family home with one parent than to move to another house. This might not be true. That family home brings with it the image of their parents together. Selling it might be the best thing for them. It allows them to move on from the thought of having a “complete family.” The emotional ties that the children feel to the home will become painful for them once they realize that their parents are living separately.
This is true not only for your kids but for you as well. It will be easier for you to move on from and let go of the past if you move to another home. There are no reminders there of your memories as a family. It will be better for your soul.
Divorce is always a painful process. Selling your marital home is going to affect you more than you think it will. It’s going to be hard on the kids, too. So, when you decide, factor in everything—from the financial aspect down to the emotional ties. Make sure that you are making the best decision for the family.