July 1, 2022
Marital Home and Divorce, Be Open to the Possibilities
A major issue in most divorce cases is what will happen with the family home. Aside from the financial impact, it is often highly emotional. It is no surprise then that early on, one or both spouses will have strong, frequently, rigid positions on the issue that make settlement difficult. Often, they aren’t realistic or prudent. Whether I am the mediator or the lawyer for a spouse, my role includes helping clients see alternatives.
In one of my mediations, the husband wouldn’t consider moving from the mortgage free home where the couple had raised their children and made lifelong friends just because the wife wanted the divorce. And she insisted the 401(k) retirement account, which was about equal to the value of the house, was “hers” because her weekly paycheck had funded it. They came to the mediation with their own “quick and simple solution”- he gets the house, she gets the 401(k).
But, especially since both were in their early 60s and about to retire, this plan had weaknesses. For her to get the new condo she wanted, she would have to liquidate a large share of the retirement account and incur a large tax obligation. For him, being house rich and cash poor at this stage in life wasn’t financially prudent. I offered another option. The husband would take out a mortgage and use the money to buy out the wife. That gave her the cash for her condo. She’d share her 401(k) with him in a tax-advantaged way. Since they were both open to an alternate solution that was better for both, after each conferred with their own lawyer, the deal was made.
The lesson: Being open to considering options and alternatives that your lawyer or mediator offers may result in a beneficial resolution on terms that were initially rejected or not even contemplated.
This article was first published in the June 9, 2022 edition of The Cheshire Citizen.
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