Divorce After 50 and the House

Nearly 40% of people who divorce today are 50 or older. Bowling Green State University's National Center for Family and Marriage Research states it this way: "Whereas only 8% of all persons divorcing in 1990 were aged 50 or older, today the share is nearly 40%." Source: Westrick-Payne and Brown, "Marriage Duration at Time of Gray Divorce," Family Profile No. 12, 2024. https://www.bgsu.edu/ncfmr/resources/data/family-profiles/FP-24-12.html

A gray divorce is a divorce in which one or both spouses are 50 or older.

For most couples I meet in this group, the house is the largest asset. It is also the asset with the most history.

It shortens your recovery time. A bad house decision at 55 or 60 is harder to repair than one at 35, because you have fewer working years left to rebuild.

Maryland Family Law Article section 8-205(b) lists the factors a court considers when it decides a monetary award or the terms of a property transfer. They include the age of each spouse and the physical and mental condition of each spouse. The court divides marital property equitably. The statute contains no 50/50 rule.

Four questions drive the house decision after 50. Write the answers down before you talk about price.

Most couples over 50 underestimate what the house costs to run. They know the mortgage. They forget the roof, the HOA or community fee, and the property tax.

Two households cost more than one, and a half share of the sale does not always buy a smaller home outright. Run both sides of the move before you list.

Step 1. The sale. Round numbers for teaching. Your house will differ.

An even split is an assumption for this example. Section 8-205 contains no even-split rule. Your agreement or the court sets the share.

Step 2. One spouse buys a smaller home.

In this example, the spouse who buys a $375,000 home needs $80,500 more than the share from the sale. That gap comes from a loan, a cheaper home, or other assets. Ask a lender what you qualify for. The lender decides.

This example leaves out Maryland transfer and recordation taxes, moving costs, and capital gains tax. Ask your title company for the transfer and recordation figures. The 3% closing cost rate is a made-up number.

A house owned for decades often carries a large gain. IRS Topic no. 701 says qualifying homeowners exclude up to $250,000 of gain from your income, or up to $500,000 if you file a joint return with your spouse.

You must have owned the home at least 24 months of the last 5 years. You must have used it as a residence at least 24 months of the last 5 years. On a joint return, either spouse meets the ownership test and both spouses meet the use test individually. Source: IRS Topic no. 701, Sale of your home, last reviewed September 24, 2026.

Home bought for $250,000. Sells for $800,000. Both spouses own it and each meets the ownership and use tests. Gain before improvements and selling costs: $800,000 minus $250,000 = $550,000.

The 15% rate is a made-up number. Ask your CPA for your rate and for how selling costs and home improvements change the gain. Keep every receipt. Case C assumes each spouse still meets the ownership and use tests when the house sells.

Two more lines from the sources apply to couples who split the use of the house. Maryland Family Law Article section 8-208(d) says an order giving one spouse sole possession and use of the family home does not affect the other spouse's right to claim the home as a principal residence for tax purposes. IRS Publication 523 says an owner treats the home as a residence for the exclusion while a former spouse lives in it as a principal residence under a divorce or separation instrument.

What this shows: Case B costs $37,500 more than Case A ($45,000 minus $7,500). Buying out your spouse and selling later alone is where the larger bill shows up.

Retirement accounts and the house often sit on the same settlement sheet, so a decision about one changes the other. I do not give retirement advice. Your attorney and your CPA do.

Maryland Family Law Article section 8-205(a)(2) lists a pension, retirement, profit sharing, or deferred compensation plan among the interests the court is allowed to transfer. Ask your attorney how that applies to your accounts.

Keeping the house costs cash every month. This is where people usually get hurt. A spouse keeps the house, then finds the monthly cost is larger than the income left.

Ask these questions before you trade one asset for another.

If keeping the home does not work, here is how a divorce sale runs.

Ask the community for its rules in writing before you list or buy out. I do not state those rules for you. Each community answers for itself.

Ask these questions.

Ask your attorney whether a spouse is allowed to stay if the community's rules change who qualifies.

A rule problem found after you sign a contract costs time. Find it first.

If keeping the home does not work, here is how a divorce sale runs.

A reverse mortgage is a loan product. Talk to a HUD-approved counselor and your attorney before you consider one.

I have seen this mistake before. One spouse keeps the house, then sells under pressure later at a worse time.

You should have your own. I am a real estate agent. I do not give legal advice, and I do not work for one spouse against the other.

I am not affiliated with any law firm. I do not recommend one attorney over another. Your spouse needs their own attorney, not yours.

If you need to find one, start with the bar association referral services: