Collaborative divorce can save the family house

broken-houseIf that’s really what you want. For many divorcing couples, that’s what they think they want and it can make things a bit contentious. If it’s a divorce by litigation, it can lead to the court making the decision for you—usually that is to sell the home and split the proceeds. Collaborative divorce keeps the door open if you and your spouse disagree on who gets the house.

How? A collaborative divorce is a negotiation where both sides put everything on the table and explore possibilities. With regard to the family home, each spouse would need to consider:

  • Can I afford to buy out my spouse in order to keep the family home?
  • Can I afford to maintain the home after the buy out?

By having all your financial information on the table as part of the negotiation, both parties can address the feasibility of keeping the family home. For many divorce negotiations, this ends the “I want the house” argument.

With a team of experts, often including a divorce coach and a financial neutral, the negotiation can address the financial realities of keeping the home but also why keeping the family home is important to each party. It is not unusual for it to be an emotional reaction tied to not wanting to accept that the marriage is over and things will be changing—e.g. keeping the family home means something will stay the same. In some cases, just having an impartial third-party to talk to can make a spouse see the real reason for wanting the family home isn’t even about the home.

Of course, there are some very logical reasons for wanting to remain in the family home– not wanting to uproot school-age children being tops among those. It’s not at all unusual for many divorce negotiations to include language that the custodial parent will remain in the family home for a certain period of time to ease the transition for school-age children.

Temporary arrangements can come with a host of considerations as well. Who will pay for upkeep to the home or capital improvements? Is that to be split evenly or will it fall on the spouse remaining in the home? Continued joint ownership also carries tax implications as well as the practical question “Do you and your spouse get along well enough to essentially continue a business relationship—joint ownership of a home—for years to come?”

The beauty of a collaborative divorce negotiation is that it provides the flexibility to keep all options open. For example, I have a number of cases where the parties have agreed to jointly own the marital home for a short period of time, either because the market is soft at the time of the divorce, the kids are close to finishing school or there are grown children in the house who are looking for first jobs and need a place to live. There have even been collaborative divorce agreements that call for the couple to remain in the home but living in different parts (e.g. each takes a separate portion of the home). These types of arrangements can be complex. Still, it does reveal the flexibility a collaborative divorce has to offer.

This kind of flexibility is in stark contrast to litigation. Earlier in my career, in the 1980s, a common court ordered divorce judgment was for the wife to get the house and for the husband to get the retirement funds. As the housing market and the stock market have gone through a number of ups and downs, this is no longer a common (nor necessarily equitable) practice. Still, it does emphasize how collaborative divorce offers more than a black-or-white solution but many shades of gray. Today, if the parties cannot reach an agreement about what to do with the house, a court is likely to simply order it sold.

Perhaps most importantly, the process of collaborative divorce provides the resources and counseling for couples to think about the life they want after the settlement. For some, it makes them think about the real reason they want to keep the house. Many times in those cases, through discussion with the collaborative divorce team, it helps spouses realize that a clean break—though difficult–might be the best thing for all. The most important thing, however, is that the parties are the ones making the decision, not a complete stranger who happens to be a judge.