Keeping the Primary Home in Divorce 

If you own a home and are divorcing, you have several options, and each has its own pros and cons. Let’s assume that children are involved. 

It’s common for parents with primary custody to want to stay in the primary home for the children’s sake. In this case, they would buy out their ex and keep the home. But they must have the savings and income to do so, and realistically be able to afford the house.    

Beyond the mortgage, there are utilities, home repairs, and taxes to consider. Can the spouse who wants to stay cover these costs on their income, spousal support, and funds from the divorce settlement? Even if it’s possible, it’s not always best to keep a home if it requires most of one’s income to maintain.
The goal of a fair divorce settlement is to create two financially stable households from one. A CDFA steps back and looks at the big picture to help couples avoid emotional decisions that can impact their bottom line now and in the years ahead.  

Co-Owning the Home After Divorce 

Couples can agree to share ownership of the principal residence after they divorce. In this scenario, both spouses agree on how to split mortgage payments and create a plan for the proceeds when the home eventually sells. 

This works for amicable divorces, particularly in cases where parents agree that children should remain in the home that’s familiar to them. However, this option maintains the financial tie between divorced spouses. One ex’s late payment can negatively impact the other’s credit, for example. 

Is Selling the Answer? 

Couples can also sell the primary home when they divorce. Maybe they want a fresh start or feel keeping it is too much of a financial burden. It may make sense to leverage the home’s equity, sell the property, and divide the proceeds. Like other large assets, real estate is generally divided equitably based on many variables, including both spouse’s income, assets, liabilities, and lifestyle. 

With that said, couples do not have to sell right away. Let’s say they have children in high school. They might agree to sell the primary home after they graduate. If so, they’ll need to determine who will reside in the home and pay the taxes, repairs, and other details as part of their divorce agreement.  

Capital Gains Taxes

Divorcing couples should also understand the implications of capital gains taxes, which are paid on the profit of a sale. The timing of the sale should be considered when it comes to calculating capital gains tax. 

Selling a primary home after the divorce agreement, but before the divorce is final can be beneficial in this regard. That is because married couples pay this tax on sales where profits exceed $500,000, but single individuals only pay on profits of $250,000. So, selling while legally married can potentially result in substantial tax savings. 

Taxes are just one of many factors to consider when it comes to the family home and divorce. Locate an EP Wealth advisor near you to discuss your own divorce financial planning needs.


EP Wealth Advisors, LLC (“EP Wealth”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented in this report. EP Wealth has used its best efforts to verify the data included in this report. The information presented was obtained from sources deemed to be reliable. However, EP Wealth cannot guarantee the accuracy or completeness of the information offered. All expressions of opinion are subject to change without notice.

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The Certified Divorce Financial Analyst (“CDFA®”) that are employed by EP Wealth Advisors, LLC are not practicing attorney, accountant, tax professional, or legal expert. All assessments and subsequent recommendations limited and are performed exclusively under the guise of financial planning. An attorney must be retained in order to professional and accurately assess legal options and/or to provide counsel. We also recommend consulting a CPA, accountant, or tax professional. 

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The decision to work with a CDFA® professional will differ amongst clients and depend on individual circumstances of each respective client. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC and/or a CDFA® will satisfy your divorce service needs. Services offered by other professionals may align more to your specific needs.  • Hiring a qualified advisor, financial planner and/or diversifying your portfolio do not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any results, projections, or other information being represented in this presentation will be met or sustained. 

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