Property division is one of the most contentious issues of a Tennessee divorce. In most disputes, a major point of argument is usually the marital home because it is often the marital asset with the highest value. While many separating spouses fight over the marital home, they are not fully aware if obtaining the marital home is actually beneficial. Therefore, it is important that a spouse make an informed decision regarding retention of the marital home.
First and foremost, a spouse willing to retain the marital home must remove the other spouse from the mortgage loan. But refinancing a mortgage can come with its own challenges, such as loan requirements with income-debt ratios. If child support or alimony will be part of income reporting for a loan, it is important to know that either is not considered regular income until it is received for an uninterrupted year.
The next consideration is home maintenance costs which include property taxes, insurance, renovations and periodic physical maintenance of the property. Again, bigger marital homes have higher costs for upkeep. While it may be feasible to retain the home despite all costs, a couple should also consider how long and how many people will be living in the house because spending large sums of money on an uninhabited property seldom makes sense.
A spouse willing to retain the marital home must also be aware of the housing market for the area because a home can be an extremely valuable asset, but only if area property assessments are high. It is important to know the housing market trends along with a forecast of property prices for the duration of time in which the spouse plans live in the home. A spouse who chooses to retain the marital home must be prepared to face some uncertainties.
Finally, a separating spouse must be aware of the tax implications that come along home ownership. Homes are valuable assets with tax liabilities that are often very high. However a thorough understanding of federal and Tennessee taxation laws can help a separating spouse make the right decision.
When divorcing people need to make sure they understand property division rules. A complete understanding can help prepare spouses for their changing economic future.
Source: Forbes, “Four Questions To Consider Before Deciding To Keep Your Marital Home,” Jeff Landers, Feb. 17, 2015