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Dividing the family home and retirement accounts in a divorce

When a couple in Washoe County decides to divorce, they will quickly find out that divorce is not just an emotional affair -- it is a financial affair as well. In fact, according to a study by the Center for Retirement Research, net financial wealth for households that never experienced a marital dissolution was approximately 30 percent greater than households that had experienced a marital dissolution.

The financial impact of divorce can be significant. Many couples will be moving from a dual-income household to a single-income household. And, assets and debts will need to be divided, including the family home and retirement accounts.

One asset that can make or break a person's finances is the family home. A person should be careful about letting go of retirement accounts in exchange for keeping the family home. It costs money to own a home. The mortgage and property taxes must be paid, and the home will need to be maintained. If a spouse wants to keep the family home in a divorce, they should first make sure they can afford these costs for the long-run.

However, in certain circumstances it can make financial sense to keep the family home. People might not make much of an effort when it comes to funding a retirement account. However, they will carefully manage their budget and cut out extraneous expenses in order to pay the mortgage, which could leave them in a more secure financial situation. Moreover, the longer the home mortgage is paid, the more equity that is built up in the home that the homeowner can access to augment their retirement savings through a reverse mortgage or by selling their home and downsizing to a smaller one.

When it comes to property division, couples should look at how the issue will affect them in the long-run. Nevada is a "community property" state, which means that marital assets and debts will be divided equally, unless the court determines that there is a compelling reason not to do so. So, spouses need to take care when dividing property to ensure that they will both have enough assets to support themselves in their retirement.

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