When a House is Not a Home

When a House is Not a Home by Fabienne Swartz

{3:39 minutes to read} I was attending an informal get-together for divorce professionals recently when I realized I had the perfect real-world case study to illustrate a very important point:

Keeping the marital home is not always the smartest thing to do.

I recounted on how a woman I knew recently approached me about her divorce. She confided that her husband was in total control of the finances and was eager to forfeit his share in the marital residence. I advised her that all the cases I have seen that appeared too good to be true were too good to be true.

I knew that the house in question was in a nice neighborhood with high property values, which immediately raised red flags about the husband’s motives. I asked her what he was seeking in exchange for such a great house. She said her husband sought the lion’s share of the retirement and brokerage accounts, and most of the savings.

Delving a little deeper, I discovered that they had bought the house for a high price in 2006 – and then the great recession of 2008 devastated real estate values. They were left with a high mortgage payment and high property taxes, in addition to both routine and unexpected repairs. Whoever owned that house would have his or her worth tied up in an illiquid asset that would cost a considerable amount of time and money to sell.  

Over the course of a period of time, investments will have a higher rate of return than a house, and at a much lesser cost. While a house needs maintenance that has the potential to be very expensive, investments are continually growing and do not require any attention or further expenditures. It is often said that investments earn you money when you sleep – of course, this has not been the case over the last few months!

I asked my friend if she had her heart set on staying in the house and she confessed that it was really too big for her needs. Luckily she had not signed anything yet, so she contacted her lawyer to reject her husband’s offer. She is currently negotiating a new settlement to the chagrin of her husband.

If she had kept the house, she would have been responsible for everything in it: the furnace, the air conditioning and everything else that is likely to break over the lifetime of a house. If she co-owned the house with her soon-to-be ex-spouse instead, both parties would be equally responsible for the cost of all expenses.

Another reason one party of a divorce may wish to keep the marital house is the presence of children in the marriage. It is somewhat instinctual to assume that the best interest of a child is to stay in the home in which he or she grew up. In reality, there is much that can be done to turn the process of relocating into a positive experience for the child, like:

  • Taking him or her to view all of the houses in consideration and make him/her part of the decision process.
  • Allowing the child to choose a theme for the new bedroom.
  • Considering the outdoor space. Is there room for a jungle gym or trampoline?

I don’t make it a secret that I am divorced with children. What I learned from my experience is that children are much more resilient than adults assume. Moving to a new home is an experience that is filled with many positives and negatives. But if a mother or father rises to the occasion, it is possible to accentuate the positive aspects of the journey ahead.  After all, a house is just walls and a roof.  A home is what you make it out to be.

Keeping the house is not always the best option. If you have questions about your house, there are professionals who focus solely on the financial issues surrounding divorce. To learn more, click here.

Fabienne Swartz JD (Belgium) CDFATM
Certified Divorce Financial AnalystTM
500 Mamaroneck Av.
Suite 320
Harrison, NY 10528
(914) 798-6940

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