Consider your marital assets. For many couples the family home is the largest marital asset that requires division and distribution in a divorce. The house can be used as an important bargaining chip when negotiating spousal support, especially in cases where the equity in the home will split roughly 50/50 between spouses.
If you’re the higher-earning spouse who will pay alimony, one negotiation strategy is to offer some, or all of your portion of the home equity to the other spouse in lieu of future alimony payments, or for a lowered alimony amount. If the total amount of alimony you would pay over the support term – five years, 10 years, etc – works out to $50,000, and you offer $30,000 in home equity to cover part of it, payments could be reduced to reflect this. Just keep in mind tax implications.
If you will be receiving support, carefully consider whether being bought-out by your spouse and staying in the family home is important to you, or is selling the house and splitting the proceeds more practical. It might seem like a windfall to have your ex-spouse offer up his or her share of the home equity, but remember, it’s just that: equity. It’s not actually liquid cash.
If your house requires a great deal of upkeep or is in need of repair, factor in these costs first before making any decisions. An alimony arrangement with regular monthly payments may make much more financial sense, especially if you think you may sell your home in the long run.
Bari Zell Weinberger is the owner and managing partner of Weinberger Law Group in New Jersey. She is Certified by the Supreme Court of New Jersey as a Matrimonial Law Attorney.