When negotiating a Property Settlement, your lawyer will generally want to know things like whether or not you prefer to retain the family home.  After all, the home is generally one of the most significant assets in the property pool and whether or not this is retained, and by who, can have a large impact on how the rest of the assets are divided.

Your lawyer will advise on the best legal strategy for your particular circumstances however, for many people, the decision is made for emotional or lifestyle reasons.  For example, where there are children at home it is often a preference to keep the home for them to live in.  Often, throughout this process the financial side of this decision is not given enough consideration.

To properly evaluate this decision, you should consider the following:

• Debt management: where you will have debt held over the property after settlement you need to ensure you can manage this debt on your income.  Don't forget to ensure you have a reasonable safety buffer in the event interest rates increase.  If you won't be able to manage the debt then the decision is simple; you need to sell.
• Cash flow: where there is equity tied up in the house you need to consider whether or not you will need to access these funds, particularly in the short term.  If you retain the property you may be able to release the equity via a loan but this may not be possible in all circumstances.  So, if you're going to be cash strapped after the settlement then you should look very closely at your options as selling and either renting or buying a new property within your new budget may be more appropriate.
• Long term strategy: many people decide to retain the family home with the intention of selling in a number of years.  In this instance, consideration needs to be given to the long term strategic impact of this.  For example, you may have limited ability to contribute these funds to superannuation at that time due to contribution limitations.  Timing is important so make sure you understand whether your plan will be detrimental to your future options. 
• Opportunity cost: your home is an investment - for many people it's the biggest investment they ever make.  So, treat it as such.  Consider what the likely growth will be on the home and compare this to your other investment options.  If you can do better financially by renting or downgrading then you need to determine whether any lifestyle benefits of staying outweigh the financial cost of retaining the home.
• Sale Costs: another potential consideration is of course what you will do after the sale.  Will you rent or buy a new home?  What do you expect to pay?  Will your expenses increase/decrease as a result?  When considering selling, you need to investigate what you can expect to spend for a new home or on rent.  Don't forget to factor in agent fees, stamp duty (if applicable), relocation costs and budget for any new furniture you may need.
• Capital Gains Tax: generally there is no tax on the sale of the family home.  However, there may be Capital Gains implications should you purchase a new home prior to the sale of the family home.  You should consult with your accountant for further information regarding Capital Gains.

If the outcome is a decision to sell then you should consider whether it is appropriate to do this before or after the settlement. Your lawyer can advise on the legal strategy side of this decision.  From a financial perspective, selling prior to the settlement will ensure any costs for the sale are shared and also share the risk of not achieving the desired price for the property.  The downside is that you won't benefit as much if a better price than the valuation is achieved (as this will then be shared between the parties) and there may be delays in the sale process.

To ensure you make the right decision, you should seek assistance from a qualified Financial Adviser.  We can work with you and your lawyer to analyse your options and set you on the right financial path.

The information in this article has been prepared without taking into account any individual's objectives, financial situation or needs.  As such, you should consider the appropriateness of the advice and information contained in this article in the light of your own objectives, financial situation or needs and you should seek your own personal advice which has been tailored to your own individual circumstances from a financial planning expert before acting on the advice or information.                        

If the advice relates to the acquisition or possible acquisition, cancellation, non reinstatement or switching of a particular financial product or financial fund, you should also obtain a copy of and consider the Product Disclosure Statement (PDS) for that product.