Creative solutions on how to deal with the house in an otherwise unproblematic, amicable divorce? (state: PA)
September 25, 2009 3:49 PM Subscribe
Looking for suggestions on how to deal with the situation where one spouse wants to stay in the house, while the other spouse could use the money from selling the house.
Standard IANAL / YANAL disclaimer.
A good friend of mine is going through a slow separation/divorce process. Amicable. They have been separated for a couple years, but moving slowly toward divorce. Apart from inertia, I suspect the main thing holding them back is the house, which is the only shared asset of note.
The house is paid off, and his wife lives in it. The wife would like to stay living in the house but she can't afford to buy him out unless she sells or re-mortgages. My friend would like to cash out his share of the house, but doesn't want to put her out of it, and feels bad about putting her in a position of having to go back into debt on it. And who wants to sell in this market?
Now, though, the wife went to a lawyer to make it official. She makes no demands or dispute at all about anything in the divorce, but in the papers he got from her lawyer, it seems she expects him to just give her the house and give up his interest in it.
My friend is the kind who doesn't want to make waves, and has just about talked himself in to going with the path of least resistance and just agreeing to her proposal, but some of his friends have been trying to convince him otherwise. I don't think he has to be vindictive toward her -- i am all for amicable when it comes to divorces -- but i think it's only fair for him to get part of the house.
What kind of options do they have for dealing with the house in the divorce? I've been trying to get him to talk to a lawyer or mediator to see if there's some kind of creative solution they can come up with.
What about keeping joint ownership of the house after they divorce -- is there some way of making an agreement that says she doesn't have to sell the house or leave, but whenever she does, she has to split the proceeds 50-50? Or could you make some kind of contract or agreement that would bind them to a time limit -- like within X years they have to resolve the house issue or sell it. I'm trying to think of ways that protect his financial interest in the house, while possibly also give time for the market to climb back up a little.
Or is it just asking for trouble for them to stay in a shared-ownership relationship after the divorce? I've been talking about this in the context of this being an amicable split, but maybe they should just suck it up and sell the house and split the money?
Are there any other creative solutions that could be helpful here?
Go to it, hive.
Standard IANAL / YANAL disclaimer.
A good friend of mine is going through a slow separation/divorce process. Amicable. They have been separated for a couple years, but moving slowly toward divorce. Apart from inertia, I suspect the main thing holding them back is the house, which is the only shared asset of note.
The house is paid off, and his wife lives in it. The wife would like to stay living in the house but she can't afford to buy him out unless she sells or re-mortgages. My friend would like to cash out his share of the house, but doesn't want to put her out of it, and feels bad about putting her in a position of having to go back into debt on it. And who wants to sell in this market?
Now, though, the wife went to a lawyer to make it official. She makes no demands or dispute at all about anything in the divorce, but in the papers he got from her lawyer, it seems she expects him to just give her the house and give up his interest in it.
My friend is the kind who doesn't want to make waves, and has just about talked himself in to going with the path of least resistance and just agreeing to her proposal, but some of his friends have been trying to convince him otherwise. I don't think he has to be vindictive toward her -- i am all for amicable when it comes to divorces -- but i think it's only fair for him to get part of the house.
What kind of options do they have for dealing with the house in the divorce? I've been trying to get him to talk to a lawyer or mediator to see if there's some kind of creative solution they can come up with.
What about keeping joint ownership of the house after they divorce -- is there some way of making an agreement that says she doesn't have to sell the house or leave, but whenever she does, she has to split the proceeds 50-50? Or could you make some kind of contract or agreement that would bind them to a time limit -- like within X years they have to resolve the house issue or sell it. I'm trying to think of ways that protect his financial interest in the house, while possibly also give time for the market to climb back up a little.
Or is it just asking for trouble for them to stay in a shared-ownership relationship after the divorce? I've been talking about this in the context of this being an amicable split, but maybe they should just suck it up and sell the house and split the money?
Are there any other creative solutions that could be helpful here?
Go to it, hive.
She just needs to remortgage; it's not vindictive to ask that. Expecting him, even indirectly, to take a loss for half the value of the home is not fair.
It's understandable that she wants to stay, but ti's not her house, it's their house. This is what happens in divorce.
posted by spaltavian at 3:59 PM on September 25, 2009 [2 favorites]
It's understandable that she wants to stay, but ti's not her house, it's their house. This is what happens in divorce.
posted by spaltavian at 3:59 PM on September 25, 2009 [2 favorites]
She pays him monthly "rent" until he's gotten 50% of the value of the house? (Numbers to be amicably but mutually agreed upon.)
posted by Quietgal at 4:32 PM on September 25, 2009
posted by Quietgal at 4:32 PM on September 25, 2009
Your friend needs a divorce lawyer. His soon-to-be-ex-wife does, so he is operating at a significant disadvantage in this process if he does not have a professional looking out for his interests. Any other course of action is like trying to drive a 2003 Kia Spectra in the Daytona 500.
posted by dersins at 4:36 PM on September 25, 2009 [4 favorites]
posted by dersins at 4:36 PM on September 25, 2009 [4 favorites]
she can either go into debt by remortgaging or she can go into debt to him through a payment plan.
amicable or not, if i were her, i'd choose the bankers. amicable or not, if i were him, i'd insist on the bankers.
he should not just let her have the house.
posted by nadawi at 4:37 PM on September 25, 2009 [3 favorites]
amicable or not, if i were her, i'd choose the bankers. amicable or not, if i were him, i'd insist on the bankers.
he should not just let her have the house.
posted by nadawi at 4:37 PM on September 25, 2009 [3 favorites]
Who made most of the money that paid for it?
Hey I think I know this guy, or at least one just like him. He should not give her half a house. But I bet he will anyway. Lucky her.
posted by fritley at 4:53 PM on September 25, 2009
Hey I think I know this guy, or at least one just like him. He should not give her half a house. But I bet he will anyway. Lucky her.
posted by fritley at 4:53 PM on September 25, 2009
in the papers he got from her lawyer, it seems she expects him to just give her the house
This seems like a reasonable starting point from a lawyer engaged by the wife, whose duty it is to protect her interests as far as they can be pushed. Your friend needs his own lawyer and should not make any response to the wife's lawyer himself. Or he'll get screwed.
"Amicable" and "lawyer" is oxymoronic. Tell your friend not to be a moron.
posted by anadem at 5:00 PM on September 25, 2009 [2 favorites]
This seems like a reasonable starting point from a lawyer engaged by the wife, whose duty it is to protect her interests as far as they can be pushed. Your friend needs his own lawyer and should not make any response to the wife's lawyer himself. Or he'll get screwed.
"Amicable" and "lawyer" is oxymoronic. Tell your friend not to be a moron.
posted by anadem at 5:00 PM on September 25, 2009 [2 favorites]
Who made most of the money that paid for it?
That's probably irrelevant. Don't know where you are, but in Canada divorce settlements don't address financial contribution inequities that took place over the course of the marriage. Short of a prenup or circumstances such as one spouse wilfully dissipating the marital assets just prior to the divorce, the marital assets are split 50/50.
Your friend will need to insist that he receives a fair share of the house's value. He can settle for less than 50% the current assessed value given that he will not have to go through the hassle of selling it or pay relator's commission or the like out of the proceeds; he can be reasonable about a payment plan. But he shouldn't just let his ex keep the entire house. He needs to make this clear to her, and if she digs in her heels on this issue and refuses to be reasonable, to get a lawyer.
posted by orange swan at 5:15 PM on September 25, 2009
That's probably irrelevant. Don't know where you are, but in Canada divorce settlements don't address financial contribution inequities that took place over the course of the marriage. Short of a prenup or circumstances such as one spouse wilfully dissipating the marital assets just prior to the divorce, the marital assets are split 50/50.
Your friend will need to insist that he receives a fair share of the house's value. He can settle for less than 50% the current assessed value given that he will not have to go through the hassle of selling it or pay relator's commission or the like out of the proceeds; he can be reasonable about a payment plan. But he shouldn't just let his ex keep the entire house. He needs to make this clear to her, and if she digs in her heels on this issue and refuses to be reasonable, to get a lawyer.
posted by orange swan at 5:15 PM on September 25, 2009
I don't know where your friend lives, but I know that my ex husband (in California), needed to re-mortgage the house to get my name off of the mortgage. If she wants to keep the house in her name only, then it may be very likely that a re-mortgage is in her future anyway.
posted by The Light Fantastic at 7:41 PM on September 25, 2009
posted by The Light Fantastic at 7:41 PM on September 25, 2009
One couple I'm aware of have spent over $400,000 dollars in legal fees trying to sort out just this kind of situation (in their case, it's more than the value of the property involved).
Your friend absolutely needs his own lawyer for this one - there are just way too many potential legal complications for him to make a decision about his best course of action without formal legal advice. No matter how tight money is, he can't afford not to have his interests legally represented. I've seen some very strange and unintended outcomes when people have tried to organise the division of property without fully understanding the law - and none of them good.
posted by Lolie at 12:45 AM on September 26, 2009
Your friend absolutely needs his own lawyer for this one - there are just way too many potential legal complications for him to make a decision about his best course of action without formal legal advice. No matter how tight money is, he can't afford not to have his interests legally represented. I've seen some very strange and unintended outcomes when people have tried to organise the division of property without fully understanding the law - and none of them good.
posted by Lolie at 12:45 AM on September 26, 2009
This is why divorce lawyers are so expensive, they're worth every penny. Your friend needs to lawyer up. He needs to tell the lawyer he wants 1/2 the value of the house. Then it is between the lawyers to come up with a plan. Amicable or not does he really want to collect rent from his ex? does he really want to deal with that for 10 years? 20 years?
posted by Gungho at 6:52 AM on September 26, 2009
posted by Gungho at 6:52 AM on September 26, 2009
Not knowing much about the construction of houses -- could you turn it into a duplex somehow?
posted by demagogue at 8:20 AM on September 26, 2009
posted by demagogue at 8:20 AM on September 26, 2009
Response by poster: Thanks for the comments so far... would be happy to hear more.
Since a couple people asked, this divorce is happening in Pennsylvania.
I wrote it in the question headline, but it's easily missed.
thanks!
posted by leticia at 10:35 AM on September 26, 2009
Since a couple people asked, this divorce is happening in Pennsylvania.
I wrote it in the question headline, but it's easily missed.
thanks!
posted by leticia at 10:35 AM on September 26, 2009
It's very important that your friend get off the mortgage, because he's responsible for the debt, even if he is taken off the deed. So she really has to refi unless the house is paid off. It's possible to use a mediator. It's okay if the settlement is not 50:50, but it should be fair, as decided by them.
You don't mention children. It could be fair to use the assets in a house as a form of child support. This would require careful lawyering.
posted by theora55 at 11:05 AM on September 26, 2009
You don't mention children. It could be fair to use the assets in a house as a form of child support. This would require careful lawyering.
posted by theora55 at 11:05 AM on September 26, 2009
A friend of mine was in a similar situation, with the ex-spouse wanting to stay in the house. If I remember correctly, they drew up (with their respective lawyers) an agreement that he had some generous number of years to buy her out of the house.
That gave him the freedom to save or sell or refinance as it fit into his life, but still get her her money, only on a more leisurely timeline. This means your friend doesn't receive his share right away, but gives the ex-spouse more time to think and prepare. In other words, if he's really focused on being generous to the ex, he could be generous with time rather than money.
posted by lillygog at 11:26 AM on September 26, 2009
That gave him the freedom to save or sell or refinance as it fit into his life, but still get her her money, only on a more leisurely timeline. This means your friend doesn't receive his share right away, but gives the ex-spouse more time to think and prepare. In other words, if he's really focused on being generous to the ex, he could be generous with time rather than money.
posted by lillygog at 11:26 AM on September 26, 2009
This thread is closed to new comments.
posted by elle.jeezy at 3:53 PM on September 25, 2009 [1 favorite]