Whether you should keep the matrimonial home, or not, comes down to a few essential questions. But one questions stands out more than the rest. Can you afford it?
Why Keep The Matrimonial Home?
Often, one spouse wants to keep the house to maintain stability for the kids. Staying in the home keeps the kids in the same catchment area for their school as well providing access to their friends and their support network. It also minimizes structural change when the kids are already going through the family transition with their parents divorce. Why should they get the total upheaval when all of this isn’t their fault, right?
All of the above concerns are valid, for sure. Minimizing change when one parent is moving out is an honourable consideration. I see many clients who want to keep the matrimonial home. Let’s not beat around the bush, it’s typically the wife who wants it. My reasoning for this, after being in financial services for over 30 years, is not for the already laid out child considerations; it’s also about how women feel about money. Money provides security. A house is something she can see and touch. The home is a symbol of that feeling of security not only for her but also for her children. Keep the home based on all these good reasons? But at what expense?
Why Sell The Matrimonial Home?
If the wife trades in her RRSP’s, pension or other assets to ‘buy’ out her spouses half of the matrimonial home then she is compromising her future retirement for her present lifestyle. Maybe it’s not a bad thing. Perhaps she can downsize once the kids have left for university or have found full-time jobs. Then the house actually is the retirement investment or, at least, part of it. Selling the home in the future to take some equity out of the dwelling to help fund retirement leaves the question, “Where can I afford to live then?”
Also, the matrimonial home needs upkeep as it costs more to run a larger home. This cash flow, then, isn’t being earmarked for retirement savings or saving for the kid’s education. I’ve even seen people try to keep the matrimonial home while, each year, they are depleting their retirement savings or remortgaging just to create cash flow. In the end, they have to sell the house anyways because they depleted all of their assets trying to keep it. That’s not a very financially healthy place to be situated.
Financial costs may not be the only concern. What about the lifetime memories that you have with your spouse in that matrimonial home? Do you want to have those memories every time you turn a corner?
Keeping the matrimonial home, if you can afford it, may be a good idea. But can you afford it? Working on a balanced budget ensuring you meet all your current and future financial goals and obligations is essential to making this decision.