For most couples, their highest-value asset is their family home. Although many spouses wish to hold onto these assets, some agree that selling them is the best option. Many spouses believe that selling the family home is the quickest and easiest way to ensure that both parties are receiving their fair share of the family fortune. Since the majority of most couple’s equity is tied up in their family home, this sale can represent the liquidation of virtually all of their wealth.
While many couples choose to sell because they believe it is a quick and easy solution, this is not always the case. In fact, the decision to sell a family home can create an entirely new set of issues that must be overcome. Sometimes, the sale of a family home can delay a divorce considerably. In other situations, spouses can be forced to sell at inopportune times, resulting in considerable losses. Whatever the case may be, this is an important decision for divorcing spouses to make.
One of the most important decisions that spouses must make during this process is when to sell. Sometimes, spouses have no control over this. They may be ordered to sell at a specific time by a judge, and they must follow through with this or face being charged with contempt of court. In other situations, spouses can choose whether to sell before or after the divorce has been finalized. Often, spouses who opt for collaborative divorces are provided with this choice. So is it better to sell before or after a divorce?
Selling Before a Divorce
Selling before a divorce can prove to be advantageous for a number of reasons. First of all, spouses may need funds to start the next chapter of their lives. This is particularly true for spouses who may have been financially dependent on their exes during the marriage. These funds can not only help spouses find a new place to live, but they can theoretically help spouses invest and plan for the future, as well.
Some spouses may even choose to use these funds for personal expenses and luxury items as they attempt to recover from the emotionally draining and often-traumatic process of a divorce. The family home can also feel like an emotional “chain” that keeps you tied to your past. Letting go of this residence can help spouses move forward and start a new chapter in their lives. Financially speaking, selling before a divorce also generally gives you a better chance of avoiding capital gains taxes.
Selling After a Divorce
One of the main benefits of selling after a divorce is that this will not delay the process of the divorce itself. Spouses can agree to continue to co-own the residence, finalize their divorce, and then tackle this home sale at a later date. Divorce decrees and separation agreements can easily ensure that both spouses will get their fair share – even if the home sale is delayed until after the divorce is finalized. The downside is that both spouses will need to continue to work together and communicate after the divorce. For couples who just want to move on and forget about the marriage, this can be tiresome.