The marital home often becomes the centerpiece of a dissolution. It’s not just the most valuable shared asset—it’s also the place where families build their lives. Deciding what to do with it involves weighing financial realities against emotional attachments. For couples in Ohio, this choice usually comes down to selling the house or one spouse keeping it through a buyout. Each option comes with financial, legal, and personal consequences that must be carefully considered.
The marital home is often tied to years of shared investment. It can represent stability for children, sentimental value for both spouses, and a major portion of the couple’s equity. Because of this, decisions surrounding the property need to be made thoughtfully and clearly outlined in the separation agreement to avoid future disputes.
Key Considerations
Emotional attachment is often a powerful factor. A spouse may want to keep the home because it’s familiar, provides a sense of security, or feels like a personal victory in a difficult situation. But keeping the home also means taking on the responsibility of maintaining it, paying taxes, and covering the mortgage on a single income. Those financial considerations must be weighed carefully.
If there are children, many parents prefer to keep the home to maintain consistency in their schooling and social circles. That stability can be beneficial during the adjustment period after a dissolution. However, practical realities—such as whether one spouse can afford the mortgage alone—can override emotional preferences.
The mortgage itself plays a critical role. If both spouses are on the loan, the person keeping the home will generally need to refinance it in their own name. This step removes the other spouse’s legal obligation for the loan. Refinancing depends on the spouse’s creditworthiness and income, and sometimes it’s not feasible. If refinancing isn’t possible, selling the house may be the more practical option.
Selling the Home: Pros and Cons
Selling the marital home is often the cleanest financial path. It allows both spouses to convert the property’s equity into cash and go their separate ways without any lingering joint financial obligations. This can make it easier to achieve a true financial break and move on with new housing arrangements.
An immediate sale also allows the couple to split the proceeds according to their agreed-upon property division terms. The equity can help each spouse afford new housing or cover other post-dissolution expenses. In many cases, this option reduces the chance of conflict later since neither spouse remains tied to the property.
However, selling also has its drawbacks. Timing matters—a slow real estate market or declining home values can affect how much money each spouse walks away with. It may also take longer to find a buyer, delaying the final resolution of the dissolution. There can also be emotional weight tied to saying goodbye to the family home, especially for children.
One Spouse Keeping the Home
When one spouse decides to keep the home, an equity buyout typically takes place. In this scenario, the spouse who wants the property compensates the other for their share of the home’s value. The buyout can happen with cash, refinancing the mortgage to remove the other spouse’s name, or offsetting the value with other marital assets—such as retirement accounts or vehicles.
Mortgage refinancing is often required to finalize the buyout. The spouse keeping the home will need to qualify on their own, which can involve strict income and credit checks. If they can’t secure refinancing, the plan to keep the home may fall through.
The value of the home also affects other property division decisions. If one spouse keeps the house, the other might receive a larger share of other assets to balance the division. For example, one spouse might keep the home while the other keeps a retirement account of similar value. A fair, carefully drafted separation agreement is essential to ensure both parties receive equitable treatment.
Tax Implications To Consider
Tax consequences can significantly affect the financial outcome of either option. If the couple sells the home while still legally married, they may qualify for a higher capital gains exclusion, which allows them to exclude up to $500,000 in profit from taxes if they meet the ownership and use requirements. If the sale happens after the dissolution, the exclusion amount may be lower.
For those who decide to keep the house, future tax considerations also matter. If the spouse keeping the home eventually sells it, they could face different tax treatment depending on their marital status at the time of sale. Additionally, the costs of property taxes and mortgage interest can affect future deductions.
Consulting with both a lawyer and a tax professional can help ensure the financial implications are fully understood before any decisions are finalized.
FAQ Section
Do both spouses need to agree to sell the home?
In most cases, yes. If both names are on the deed, both spouses must agree to sell. This decision should be clearly outlined in the dissolution agreement to avoid future conflicts.
Can we co-own the home after dissolution?
Some couples choose to continue co-owning the property temporarily. This arrangement can work if both parties trust each other and have a clear written agreement about responsibilities, such as who pays the mortgage, maintenance, and property taxes. However, this option can lead to complications down the road.
What happens to the mortgage in a buyout?
The spouse who keeps the home usually refinances the mortgage into their name alone. This removes the other spouse’s legal responsibility for the loan. If refinancing isn’t possible, other arrangements may need to be made, or the house may have to be sold.
Making a Well-Informed Decision
The marital home is often the largest financial and emotional asset in a dissolution. Whether you choose to sell it or keep it, the decision will shape your post-dissolution financial life. A clear separation agreement that addresses refinancing, equity division, and tax responsibilities can prevent costly disputes later.
Working with experienced legal counsel can help you evaluate your options and create a fair plan. At Garretson & Holcomb, LLC, we help clients throughout West Chester Township and the surrounding area understand the legal and financial implications of keeping or selling the marital home. Our team provides straightforward guidance to help you make practical choices for your future.
If you’re facing this decision, call us at (513) 863-6600 to schedule a consultation and get the clarity you need to move forward with confidence.
