Divorce brings a multitude of changes to your life. One of the most obvious changes is a new living arrangement. You and your soon-to-be ex will now be living separately—so who stays in the home and who goes? What should you do? As you work through the terms of you divorce agreement, consider these things regarding your current home.

Renting

If you are currently renting, the costs of getting out of a lease are probably relatively minimal. If you have children and want to stay put for their sake, you could take over the lease. Alternatively, you could talk to your lawyer about making that a part of the divorce settlement.

Because renting is a short-term situation, you must think ahead to how much you need going forward. Will you need a down payment on a new rental? What will your cost of living be? Make sure you address those needs in the divorce settlement. Don’t lock yourself into a situation that you won’t cover your expenses going forward.

Own a Home

Owning a home can make things a bit trickier when it comes to dividing assets in a divorce. Your home is probably one of the largest assets that you have, if not the largest. Splitting the equity, though, can be almost as tricky as splitting the home itself would be.

If one of you is keeping the home

When one spouse stays in the home, they must agree on who makes the mortgage payment (if there is one), and how the equity is split. This is something that must be considered carefully because if your husband was the primary wage earner, you must now figure out if your income, potential alimony, and child support will be adequate to cover the mortgage payment on your own, along with your other bills.

If there is a substantial amount of equity in the home, you must also figure out how that will be divided. Will you need to take out a home equity line of credit? Or will the equity in the home be able to be compensated for using other assets, such as savings or retirement accounts? You will want to make sure that you are financially able to stay in the home once it is awarded to you because selling the home shortly after the divorce is finalized would cause you to incur all of the realtor fees on your own, which could end up costing you several thousand dollars.

If you both decide to sell the home

Selling the home at the time of the divorce allows both parties to share in the realtor fees, as well as easily splitting any equity. While it can be a big change—and a very sentimental one—it also gives each of you a fresh start. This is also a good time to evaluate things like:

• Where you want to live, in relation to any custody agreement
• Whether or not you want to downsize
• How you will utilize the equity you got from the sale of your old home

Jointly keeping the home—for now

Depending on how well you and your ex get along, you may decide to keep the home—at least until your children are grown—and adopt some form of a “nesting” living arrangement. This is where you and your ex keep your home as the primary residence where the children live and then each parent takes turns living with the kids for a few days a week. Some couples even share rent on a secondary residence where they can stay when they are not in the primary home.

While this may sound crazy, there are some definite positives to this type of arrangement:

• It gives children the stability of staying in a familiar home
• Parents don’t need to buy spare clothes or toys for the kids, unlike in a custody traditional “back and forth” custody agreement
• It can be a very economical housing option for the divorcing couple, if they can make it work

With this type of arrangement, you need to agree on how to handle the home once the children are grown. Will one of you keep it, or will you sell it? At what point is the home to be sold? How will the equity be split? What happens if one of you decides to remarry?