When it comes to the division of your marital assets during a divorce, it's probable that your two largest assets are your home and your retirement savings, two things that you've likely been putting money into over several years or even decades. Dividing these assets can be a challenge for many couples, but doing so doesn't need to be as difficult as you might think. If your home and your retirement savings are worth roughly the same amount, a good plan is for one of you to take one and your former spouse to take the other. For example, you keep the house and your spouse takes the retirement savings. Here are some benefits of this division that you may want to discuss with your divorce lawyer.
There's No Rush To Sell
A lot of couples choose to sell their marital home during their divorce. This can make sense from the perspective of each of you getting some cash that you can use for future housing, but you won't always get as much as you might wish. Rushing to sell can be advantageous for the buyer, not the seller. When the buyer gets an inkling that you're divorcing, he or she will often offer well below market value. Additionally, should you get divorced in a down market, you'd also lose money. When one partner keeps the house and the other takes the retirement savings, the one with the house can decide to sell only when the time is right, or not at all.
Both People Can Make More
Real estate and retirement savings are similar in the sense of them both being investments. Dividing them so that one person has one investment and the other person has the other can allow you both to earn more from these investments. For example, if you have $200,000 in retirement savings and are getting a return of two percent annually, it's difficult to justify dividing that money in half. In such a scenario, you'd each be getting two percent, but on half of the original amount. Conversely, the partner who keeps the retirement savings will continue to get his or her return of two percent based off $200,000. And, the partner who keeps the house should ideally see its value climb in the years ahead.
It Can Lead To Good Feelings
A divorce doesn't yield a lot of good feelings, but there can be a silver lining in this difficult time in your life when you divide these two assets in this manner. If you keep the house, for example, you might find some happiness in knowing that you've left your marriage with a large asset, and one that has some sentimental quality to you. For many people, this can be better than selling the house and splitting the money. Similarly, the spouse who keeps the retirement savings may feel appreciative that the savings includes money from his or her spouse, a nice reminder in the future that even if your marriage didn't last, your spouse did provide for you financially. Speak to your divorce attorney about dividing these assets in this manner.