Staying the Same House After Divorce? Things You Need Consider

I know this is a question many divorcing couples will face. If you bought your house in 2006, 2007 or even 2008, you may not have a choice in this matter as the value of your home may be worth less than you paid for it and thats another article for another day.  But if you bought your house prior to the bubble, and there is some equity in it, first of all, congratulations and second of all, what do you do with it?  When it comes to your house and divorce you have three choices as I see it:

Option 1: Stay in it until such time when you both decided to sell
In this case, either one or both of you would live in the house as roommates and share in the care and upkeep of the home.  If you were to live together, you would each come to an arrangement on how both the basic expenses of the home were taken care of, any minor repairs or updates and any capital repairs that may be needed such as a boiler or roof.  In the case where only one of you would live in it until you both decided it was time to sell, you in effect would be renting it from you and your ex-spouse so in these cases, wed usually have the tenant (that is you) pay the mortgage, utilities and keep the house in livable shape performing such tasks as cutting the grass and shoveling the walk. 

If a capital repair were needed like a new roof, youd share in that cost as it goes to the value of the home when you sell it.  This situation is good for people where the home is underwater or the kids are just about to graduate and they can hang on for just a short bit.  It also works for folks who want a divorce but just cant afford to establish a separate residence just yet.  Remember when working with your mediator to establish a timetable for when one of you will move out or the house will go up for sale.  Do NOT leave it open ended!

Option 2: Have one of you buy out the others share of equity
This can be accomplished a number of ways.  You can either trade other assets to compensate the party who is being bought out or you can obtain a larger mortgage and pay them a cash settlement for their share of the equity.  Remember its the equity in the house, not a share of the list price so work with your  mediator to subtract the outstanding mortgage balance when figuring out who gets what.  This  makes sense for people who have the means to keep the house for the long term as chances are youll need to take on the whole mortgage outstanding plus add to it so your payments will go up and with todays tight credit, you may or may not qualify.  Be sure youre doing this for the right reasons (that is YOU want to own a house) and not just because you think your kids want to stay in the house.  Trust me they dont if it means constantly worrying about money and having to spend every free moment they have caring for it.

Option 3: Sell it to a complete stranger
This one requires little explanation but a trick I use as a mediator is if there are small disagreements on when to list and for what price is have one of you interview and provide a list of three agents youd be happy working with. Then we have your spouse pick the one agent youre going to list with.  Abide by their recommendations and you should be fine.  Remember its a buyers market so price your home wisely and be aware if timing matters to you so youre not holding on to the house for too long.  This makes sense for couples who either cant or dont want to keep the home or for those whose children are older and grown.  You may not need to live in a 4 bedroom house if its just going to be you.
No matter what you decide, remember do a budget to see what makes sense for you vis a vis housing costs.  Sometimes if a home is paid off or has a low mortgage rate, it makes sense to keep it even if the place is too big for you or if renting something is going to cost you more than your current place does!

What To Do Now When Contemplating a Divorce

If youre contemplating a divorce, a question you may be asking yourself is what steps can I take now so that when the time comes, I am ready to move forward? The answer? Investigate your household finances.  Divorce and mediation each cover four main areas: parenting plans, child support, alimony and equitable distribution. And while 99% of the time in mediation the parenting plan is agreed to by the parties and child support in New Jersey is for the most part calculated, that leaves alimony and equitable distribution as the areas that usually incur the most discussion. What do both of these have in common? They require household financial data to properly resolve them. So if youre contemplating a divorce, its important you have a good grasp of your financial picture.

During conversations about equitable distribution you and your spouse will be asked to provide a complete list of discovery items which include common financial items which show up regularly like tax returns, pay stubs, bank balances and credit card balances but there are some other documents youll need which may only be issued quarterly or annually so now it a perfect time to be on the lookout for them.

Much like how employers are required to send you your annual W-2 form showing your earnings for the previous year by the end of January, investment houses are required to do the same. Some pension plans such as plans for firemen, police officers and teachers may also only offer an annual statement so now more than ever, its critical you keep an eye out for these items so that when the time comes to talk equitable distribution youll be informed and can have an intelligent conversation.
Items to be on the lookout for when contemplating a divorce include:
  • W-2s
  • Year end Credit card statements most companies can issue you a report that shows spending by category which is helpful for budgeting later on.
  • Year end Investment / brokerage statements  showing all transactions made over the course of the year so youll notice if there were any major sales of assets that you were unaware of.
  • Year-end mortgage interest and escrow statements shows interest paid, taxes (usually) and the balance on your mortgage.
You may also wish to do a few valuations of major assets you own such as cars and your house to get a rough idea of what those are worth as well.  Sites like Zillow for real estate valuation and Kelley Blue Book for automobile evaluation can help you more fully understand what your home or car might be worth when it comes time to talk equitable distribution. Like the old saying goes information is power and by taking these simple steps now,  if youre contemplating a divorce you can be better informed when it comes time to talk equitable distribution and get a fairer settlement.

Co-Parenting: How to Raise Children of Divorce

If you’re a parent, you already know that parenting a child is difficult even under the best of circumstances; adding a divorce to the mix can make your job that much harder.  If you are considering divorce or already in midst of a divorce, you might be looking for the best possible way to raise children of divorce.  The answer may actually surprise you.  Drum roll please…….The answer in how to raise children of divorce is co-parenting.  For children trapped in the rubble of their parent’s separation, co-parenting is a great antidote to the pains of divorce.  Why?  Because focus is shifted away from the divorce itself and instead diverted towards the needs of your children.

What is Co-Parenting?
Co-parenting is new approach to raising children of divorce.  It allows both you and your spouse the opportunity to maintain a positive and nurturing role in your children’s life despite the fact that you are divorced and living in separate homes.  Many divorced couples who have chosen co-parenting have experienced great success.  For couples where co-parenting failed, communication, or better yet, a lack of communication from either one or both parents was the culprit.  Parenting plans seldom if ever fail.  It is the parents who are tasked with the responsibility of carrying out the parenting plan that contribute to its demise, not the parenting plan itself.

Communication is Critical to Successful Co-Parenting
Whether you’re in the beginning stages of divorce or at the end you already know that communicating with a soon to be ex can be extremely difficult.   And while a divorce may legally sever the martial bonds between you and your spouse, a divorce in no way relieves you from the obligation you have as parents to raise your children.  It doesn’t matter if you and your spouse separate as friends or if you find each other despicable, your children need and deserve the love and interaction of both parents; a mom and dad.   Your children are never the cause of a divorce.  As such, your children should never bear the burden caused by your and your spouse’s decision to end your marriage.

The Benefits of Co-Parenting
So why are parents finding co-parenting attractive?  Because similar to mediation, co-parenting encourages input from both individuals; in this case, mom and dad.  In co-parenting, you forge a new relationship with your spouse; however, this time instead of you and your partner reaping the benefits, your children do.  Co-parenting encourages combined decision making on issues such as visitation schedules, medical and dental appointments, school information, and extra-curricular activities.  Your participation starts with a verbal commitment to share equally in their care and upbringing that is later reduced to a writing called a parenting plan.

Still curious about co-parenting?  If so, then you need to look no further than the individuals who benefit the most….your CHILDREN.

CChildren First.  In co-parenting, it’s all about your children.  The needs of your children come first.

H Honesty.  Co-parenting promotes honesty; not only between you and your former spouse but with your children as well.  With a parenting plan in place, you and your spouse know what’s going on and your children are less likely to pit on parent against the other.

I Invested Interest.  Your child needs both an invested mom and dad.  When you are an active participant in your child’s life, your child will thrive.

L Lessens resentments.  Co-parenting promotes the input of both parents affording each parent the opportunity to maintain a healthy relationship with the children despite divorce.

D Dual decision making.  One goal of parents should be to bring an emotional healthy child into adulthood.  Co-parenting put parents are on equal footing. Both mom and dad make decisions together (emphasis added)…decisions that are in the best interest of the children.

R Role modeling.  Actions speak louder than words.  Co-parenting is a phenomenal way to show your children that despite adversity, people should treat each other with respect.  This is a behavior that once seen, your children will most likely apply to all facets of their life.

EEqual opportunity.  In co-parenting each parent is given equal opportunity in being a part of their child’s life.

NNegates negativity. In co-parenting each parent contributes equally in the decisions that are made as well as each parent is encouraged to share in activities such as school functions, sporting events, birthdays, graduations and holidays.  Happy parents rear emotionally healthy children.
Children don’t choose their parents nor are they the cause of divorce.  Children of divorce deserve and more importantly need the positive interaction of both you and your spouse.  While your marital relationship may be ending, a new and better relationship with your children is just one call away. 

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