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How keeping a home may help some who are divorcing

On Behalf of | Jun 26, 2018 | Divorce

When people in Arizona get a divorce, it could lead to a reduction in their financial stability and that stretches into retirement. This may be particularly true for older adults who are already near retirement and who are getting divorced at much higher rates than in the past. A study by the Center for Retirement Research found that people who were divorced were 5 percent more likely to run out of assets. However, this did not appear to be true for divorced single women.

It is common for financial professionals to advise against a woman keeping a home in divorce. However, this study found that as women enter retirement, if they still have the home, it may be a source of financial security and of equity.

Sometimes women want to keep the home because they hope it will make life more stable for their children. Financial advisers often tell women not to do this because they are often unable to keep up with payments such as insurance, taxes and homeowners association fees in addition to the mortgage. One financial adviser says she tells women to let the house go if they cannot keep it for a minimum of five years. However, women who are prepared for the financial burden may want to consider keeping it as a valuable investment.

In Arizona, a community property state, the home and most other assets that either person has acquired since the marriage may be considered shared property for the purposes of property division . Dividing the home may be complex even if the couple has agreed about how to do it. For example, one spouse may need to buy out the other but lack the money to do so, or the couple may want to sell the home but the market may be weak. Some couples keep the home until these issues can be resolved.