Keeping the family house after divorce, who pays for what?
I know we need to hire a mediator and probably individual lawyers as well, but I was hoping others could share how they handled the mortgage and maintenance costs of the family home after divorce. My soon to be ex refuses to tell me whether he wants to stay in the house or leave until he sees the math laid out. Even though this is an obvious and familiar delay tactic, it would be helpful to know how others divide things so we can have some kind of initial conversation before paying a huge hourly rate to a professional. He earns more than I do and we plan on 50/50 custody so he’ll owe me some child support and alimony after our long marriage. If I stay in the home and we do deferred sale, it is not obvious to me whether he should have to pay for maintenance and/or home improvement (not that we’ll be able to afford that) given that he’ll get some of the increased value eventually. In addition to talking to a lawyer it would be helpful to hear how others handled these expenses (or other creative ways to handle this). If he moves out he would rent because we do not have the money to buy another place, so it’s going to be uneven no matter what.
Parent Replies
I'm sorry you're going through a divorce. I wish you stability and contentedness on the other side.
I'm coming up on year three of divorce after a 25 year marriage. My children were 18 or older when the divorce finalized, so no child support even though one of the children lived with me and continues to return home during college breaks. After all other assets were divided, I had to buy out my ex-spouse's half of the home. This meant me taking out a large mortgage in my name which was a challenge, as mortgage lenders want to see 6-months of spousal/child support. I was able to work with a financial planner at Schwab who connected me with a mortgage broker at Rocket to make it happen. I also negotiated a window of time after the division of assets to get the mortgage in place and buy him out. It was a lot of work and took a lot of motivated people helping me. I am responsible for all house-related costs. It may be different if your children are younger.
I highly recommend attending a Second Saturday workshop and getting representation in place before getting too far into negotiations or assumptions around negotiations. What you don't know can hurt you for the long term (like who keeps the property tax basis if you're of a certain age). Good professionals know a lot and can come up with creative solutions.
When I got divorced, I bought out my ex for half the equity of the home. We specified the home value on a determined date, and also specified the amount of time I had to get the money together. I have been responsible for all the maintenance, since the house is only mine now. It is no fun to scrape together that amount of cash, but neither is staying entangled, so that was the best option for us. I wish you the best.
I’m sorry you have to go through this. It can be hard even when it’s the very best decision and everyone plays nice. My ex and I used a great mediator and though we intended to, neither of us hired our own lawyer. Both parties really need to trust each other for that. Since you’ll receive alimony and child support, I suggest you at least have your own attorney review draft agreements around that. Before my ex moved out, we agreed he would look for a place that was roughly around the cost as our mortgage/taxes/insurance or less. After he moved out (before our assets were divided), we jointly paid 50/50 for his apt rent and our house mortgage/taxes/insurance plus utilities for both places. He paid his deposit b/c he would get that back after he moved out. This seemed the most fair financially. After we divided all the assets except the house, I paid our house expenses and my spouse paid his own for his apt. In lieu of child support for our almost adult child living mostly with me, my spouse reimbursed me for half of our child’s hard costs. Our marital dissolution agreement stipulated a time period when I could buy out my spouse’s half. I chose not to. Since our now adult children still have expenses that we pay and we are selling our house, we maintain a shared Google sheet for joint expenses and a joint checking account that we use as a pass-thru to pay each other once a month as needed. This has worked well. Best of luck to you!
Hi- I'm so sorry that you and your family are in this situation. I don't know how old your kids are, etc., but something you may want to consider is NOT keeping the house. If you sell the house as a married couple, you're able to exclude twice as much of the gains on sale($500K) from capital gains tax as you will be, if you sell it later as a single person. Of course, this may not be relevant if you expect to gain less than $250K upon sale.
I know you may want to stay in your home to reduce the disruption for your children. Another option for doing that, which requires goodwill from both parents, is to keep the house and take turns staying in a smaller rental. The kids stay in the family home fulltime and the parents rotate in and out, depending on the custodial schedule. Check with your tax person to see if you each get up to a $250K exclusion if you sell the house later as divorced individuals.
This is just based on my experience, but typically you will agree (with or without the 'assistance' of a judge) on a monthly amount of spousal support and child support, based on a computer model that takes into account your respective incomes. I think it will feel cleaner for you to just understand what monthly amounts you will be receiving from your husband, and then decide how you should best use that money for yourself and your kids. The child support ends for each child at age 18. Your husband may not be eager, after he keeps his monthly financial obligations to you, to pay a (greater) share of maintaining the family home. If he does so, you'd need to agree on how to allocate maintenance expenses, and also agree on the allocation of the proceeds when the home is sold. Do be mindful that continuing to own the home jointly is going to require ongoing communication and cooperation that may or may not be easy for either of you.