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Divorce advisors say keeping a marital home may not be worth it

The marital property was once a prized possession in divorce settlements. An ex-spouse and children, who had endured the upheaval of a marriage, could be housed in an emotionally familiar place and remain in a stable environment.

Financial advisors say divorce fantasy was common before the recent recession and housing crisis. Property values have fallen dramatically since the economic downturn. One-income survival, even among wealthy divorcing couples, is less certain than it was just a few years ago.

Experts say divorcing couples who are willing to sell their home to a new buyer are floundering in a seller-unfriendly housing market. The disparity between mortgages and the current value of properties has made selling a marital home difficult.

A once-treasured asset funded by partners has turned into an unaffordable luxury for divorced and single homeowners. Trying to maintain a property alone, on half or less of a previous married income, is a risk many individuals think is too great.

Couples, especially those who lived to their extreme means during marriage, sometimes are surprised to learn that divorce means a step down in the quality of life.

Severing a marriage is more than taking separate paths as individuals. It becomes a division of income, assets and liabilities. Living separate lives also creates added expenses, like furnishing separate homes, purchasing single-owner insurances and paying property taxes with one salary.

The newly-single often find themselves faced with financial compromises they did not expect and do not want. Legal, financial and real estate experts say an ex-spouse who retained the marital home in the past held a long-term asset that retained or exceeded its value in the future. During and after the recession, real estate values dropped.

Divorce and money advisors say splitting couples now argue over which spouse is stuck holding onto the marital property rather than which one gets to keep it. Divorce disputes are rife with couples disagreeing about a home's valuation and sale price.

Instead of an asset, some couples' homes have become illiquid liabilities in an unpredictable job and real estate market. The attraction of living in the comfort of a familiar home is no longer as popular or financially sound as it once was, as the price tag for many divorcing couples has become too high.

Source: forbes.com, "House Regret: Among Divorcing Couples The House Is Now A 'Hot Potato," Marcelle Sussman Fischler, Oct. 12, 2011

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