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Divorce: Should You Keep The Family Home?

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Finances Divorce Expert: Jo Ousterhout

Helen says that her biggest mistake during her (mostly amicable) divorce was agreeing to a division of assets that left her with the family home.

Her husband had drawn up a list of their shared assets. Divided it in half, and presented the list to her. Exhausted by months of negotiation and just wanting everything to be over (who wouldn’t?), she glanced at the bottom line and agreed to his division. After all, the dollar amounts were equal, so the split was equal, right?

Not really.

A Large Family Home:

Only later did she wake up. Yes, the dollar value of each half was indeed equivalent at the time she had agreed to the split. However, her husband kept most of the stock and bond portfolio. By far the largest part of her share was the family home. A large home on an extensive lot that they had purchased primarily because her husband loved it.

And while she was happy that her young children had not been forced to change homes while their parents were splitting up, she was now the owner of an asset that was way too large. Add to that, she had never really wanted  it anyway. And which, unfortunately, was costing her tens of thousands of dollars every year in property tax, home and garden maintenance, and repairs. Not to mention supersized utility bills.

Home Is Also An Asset:

Many women instinctively want to keep the family house as part of a divorce settlement. After all, it is where you raised the kids and yes, it is home. And keeping it is certainly less dislocating than finding a new place and moving at such an emotionally fraught time. But remember your home is also an asset. And typically, one of the largest components of your family’s total investment and property portfolio. Work to eliminate emotion and approach your home as the asset it is.

“True, the value of this portfolio would fluctuate with prevailing market prices.”

Divorce Is Not So Amicable:

As Merrill Financial Advisor Megan Stirrat observes, “One of the biggest mistakes my divorcing clients make is to try and keep the marital home when they can’t afford it. If you decide to put your home on the market, have it appraised right away so you can agree on a price.” *(If the divorce is not so amicable, each party can get their own appraisal. Then, the two can be averaged to come to an agreement on price.)

Because of the size and location, Helen’s home wasn’t very saleable. Even if she had wanted to move, she couldn’t sell her home for anything near her purchase price. In financial terms, her home was illiquid – not easily convertible into cash.

On the other hand, her husband’s half of the family assets was primarily an investment portfolio of stocks and bonds. True, the value of this portfolio will fluctuate with prevailing market prices. But it was extremely liquid, and easily convertible into cash.

Options Were Much More Limited:

Having cash means you have options. Cash can be used to buy anything. Helen’s options were much more limited. Since so much of what she owned was represented by the illiquid house.

(By the way, Helen is a long-time, successful Wall Street executive. This just goes to show that almost all of us, (except maybe Warren Buffett) will sometimes do things with money we wish. In retrospect, we hadn’t. Sharing stories about money mistakes, near-misses and successes are how we learn.)

“Cash can be used to buy anything.”


When my parents divorced, my mom kept the house. As well as most of the furniture and art my parents had accumulated over the years. There were many nice pieces. Although with mostly sentimental, not commercial or collectible, value. (No Picassos, unfortunately!). So, while she was surrounded by the trappings of a comfortable life, she didn’t have the ready resources she needed. So she sold some of what was set aside for her retirement, which in turn, severely limited her options as she grew old.

Not Owning A Home Can Be Liberating:

“consider the value of having options, represented by cash or liquid investments”

If you are considering divorce or currently divorcing, consider the value of having options, represented by cash or liquid investments, at a time when you are starting over in so many aspects of your life. Not being tied down through homeownership can be liberating and will free up time, money, and headspace for you to focus on the life you are reinventing for yourself.

P.S. An observation (from my own experience as well as the stories from friends whose parents have divorced): Don’t be guided by your young – or grown – children saying they want “someone” (you!) to keep the family home. Helping your children to preserve human relationships – family, friends, community – during and after divorce is much more important than the physical home. I didn’t end up missing the house, but I sure did miss the people and feeling of community once my parents divorced and moved away.

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About the Author:

Former Wall Streeter Jo Ousterhout helps successful, motivated women develop personalized, goal-based financial plans so they can live exactly the life they want. She has mentored hundreds of women to grow their wealth quickly and develop unshakeable confidence in making the best financial decisions for themselves and their families. A former senior executive on Wall Street, Jo has also been an entrepreneur, consultant, Board Chair and ED of a not-for-profit. She has an MBA in Finance from The Wharton School, a B.S. in Biology from William & Mary and has completed the Series 65 exam, required for individuals to act as investment advisers in the US.

To learn more, visit Acumen8.co or contact Jo directly at acumen8.co