Hate Your Spouse? Give Him The house!

Judges in divorce court must go cross-eyed over the number of times they listen to people wrangling over who keeps the house. It’s usually the woman, who wants to stay put so the kids don’t have to change neighborhoods, school, and friends (or maybe, so she doesn’t have to face cleaning out their bedrooms).

When there was a ton of equity in the home (remember the good old days), the husband might have put up a fight, but my guess is that now, he’s more willing to turn it over. The woman breathes a sigh of relief, feels as if she’s protected her kids, and off the husband goes with all the liquid investments.

Yeah, I know those paragraphs are filled with stereotypes, but let’s just go with this for a minute. I’m going to direct my little fable to women, because that’s who talks to me the most about keeping the house, but if you’re a guy in the middle of a divorce, just change all the pronouns—most of the advice will be just as applicable to you.

So, let’s say you really hate your soon-to-be-ex and want to be as mean as possible (no, I’m not advocating that, just sayin’): Give HIM the house. Why?

  1. He’ll be stuck with an iceberg that has an appreciation potential of, what? Nowadays? Let’s be generous and say 2%. And people talk about the poor return of bonds!
  2. It’s an asset with no cash flow (except out the door, see below). So no matter what it might be worth on paper, he’s not going to see any dividends or year-end capital gains going into his money market account.
  3. Money is definitely going to be moving, but as I say—out the door. Figure on at least 1% of the house’s value in maintenance and repairs. Probably a lot more the first couple of years—warring couples generally put off a lot of maintenance because they’re too busy with their other problems. Also, there’s a real impulse to change everything, obliterate all signs of the former spouse, and get the place finally looking the way you’ve always wanted it to, if only you hadn’t had to argue about it. All those new decorating touches are going to cost him a bundle.
  4. It’s a mess. The one that moves out takes what he needs, and the owner is left with all the junk that’s accumulated over the years.
  5. There may be very little equity, but still a mortgage to pay.
  6. As soon as the kids grow up, it’s going to be way too big for him, but he’ll still be paying utilities for the whole heap.
  7. Unlike sales prices, property taxes keep going up. Even if he manages to pay off the mortgage, the property taxes are an inescapable expense.
  8. He’ll be chained to one place. Accept a better job in another city? Not until he sells that one. Like to go traveling in Europe for a few months? Time to pay a house sitter.
  9. He gets to shovel the snow, mow the lawn, clean the toilets, or pay someone else to do it.
  10. The kids will have an easier time moving back home. Without a job. On his grocery bill, utilities, gas, insurance, etc.

Meanwhile, you can move into that apartment, condo, townhouse or pied à terre in Paris, where you call the supervisor to fix everything and don’t mow the lawn. I dream about it every time I shovel snow. And yes, I kept the house.

About the author

Danielle L. Schultz, CFP®, CDFA

Danielle L. Schultz, the principal financial planner of Haven Financial Solutions, is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a NAPFA-registered Financial Advisor, and a Registered Investment Advisor in the State of Illinois. She studied financial planning at Northwestern University’s Certified Financial Planner™ certification program. She also holds a Series 65 license (Registered Investment Advisor Representative) and a CCPS (Certified College Planning Specialist).

She writes a regular column for Better Investing magazine and is currently working on a revision of their mutual funds handbook. In addition to academic training and professional experience, Ms. Schultz has personally managed Social Security, Medicare, retirement and long-term care issues; college funding concerns; and cash flow and transition planning in self-employment and divorce situations. Her social work background gives her an innovative perspective on financial planning issues; for her, financial planning is not only about money, but also a key component in a satisfying and well-lived life.

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