In many divorces, things are fairly amicable. There is often – though certainly not always – a certain amount of respect between the parties, even if one or both spouses ultimately intend to end the marriage.
In these cases, there’s often a fair amount of negotiation that takes place behind the scenes. Clients will come in and say that they’ve already agreed to certain things and ask that their agreement be drafted to reflect these understandings. We are happy to oblige!
Even in these cases, though, there can be pretty significant misunderstandings. Though I always advocate for my clients (at least, the ones who reasonably can) to handle things themselves, whenever possible or reasonable, I often caution them about their understanding of certain “terms” of the agreement.
He said he’d give me the house!
I find that, in a lot of cases, the house is a major sticking point for my clients. As a person who has a deep and passionate love for her own house, I can completely sympathize. Not only am I highly sentimental about things like having brought my daughter home from the hospital to live in that house, but I also just love it for itself. It’s charm. It’s comfort. It’s sense of security.
So, if you tell me you want the house, for any number of reasons, I can completely understand.
But I do often have to counsel my clients that, even though he said she can “have” the house, that doesn’t necessarily mean that he intends to make a gift of it. In fact, he probably doesn’t.
He almost certainly does not intend to give you an asset worth tens of thousands of dollars (maybe even hundreds of thousands or millions, depending) and just…walk away.
That is often the way their wives interpret what they’ve said, but I can’t think of a single example of a case where that was actually what happened.
What if he buys me a car? He has a newer one than I do, and we’re separating, so it makes sense.
This happens, too. In many cases, parties take a look at their assets, and make decisions about what they’ll each need to survive post-divorce.
Can he do this? Would he do this? What does it mean, legally?
Dividing assets means, in most cases, dividing the EQUITY in them roughly 50/50.
Whether it’s the home or the car we’re dividing, we’re usually looking at the equity associated with it. So, FINANCING a new car “for” you is not actually giving you an interest in an asset with very much equity. Almost certainly, you’ll take the loan along with the new car, so I’d caution you to purchase one that you can actually afford on your post-divorce dollars. (If you don’t know what those post-divorce dollars will look like yet, then maybe it’s a little premature to be making such a big purchase on credit!)
PURCHASING a new car for you is something different. If you buy a car and pay for it in full, then you have an asset that is worth what the car is worth. We often use Kelley Blue Book to help us determine value in these kinds of cases, but if you’ve recently purchased it you probably already have a pretty good idea what it’s worth.
To the extent that you take something worth a certain amount of money, there’s also probably the expectation that he’ll take something worth a similar amount, too. Dividing assets 50/50 doesn’t mean you have to sell everything and physically split each item individually; in fact, it rarely means that. Dividing 50/50 usually means that, if you take a car worth $20,000, he’ll also take some things (maybe a car, maybe some other things that add up to a similar value) worth roughly that amount.
That’s also true of the home. If there is equity in it, he’s likely expecting you to either buy him out of his portion as part of the refinance, or to give you his portion of the equity in some other asset. Maybe he wants you to reduce your interest in his retirement by the amount of his portion of the equity in the home – in fact, that’s a pretty common one.
Of course, you don’t have to agree. However much you might want to keep the home (and, like I said, I understand!) it’s definitely best if you look at things – as much as you can – like a disinterested third party. Can you afford it? Is it worth trading off your equity in the home for, say, a portion of the retirement that you’d otherwise receive?
Its not a bad idea to meet with a financial planner or some other expert who can help talk you through your options and give you an idea of what things will look and feel like. Remember, a home isn’t just a question of a mortgage payment; it’s also often a question of taxes, insurance, maintenance, and upkeep. Can you really do it? Is it smart? Would there be a better alternative?
I don’t tell you this to be a Debbie Downer, but to prepare you for what to expect. In either case, it’s likely not a “gift” so much as him acknowledging that he’s willing to set things up in a way that makes you feel a bit better. He’s probably not being a jerk about it; after all, how many people do you know who can actually afford to just walk away from the equity in their home, or buy a car for someone as a gift? My guess is that it’s not too many.
It’s not that he might not wish to, necessarily, though I’ll readily admit that I don’t know him and can’t speak to his motivations. But, realistically speaking, he probably can’t afford to just give away the farm (or the brick split level) because he respects you or the fact that you’re the mother of his children.
The better your expectations, the better off you’ll be. If you and your husband are able to negotiate between yourselves, you’ll save money on attorney’s fees and, ultimately, increase your satisfaction with the process. I’d never suggest that this will be easy, or that it isn’t a heart wrenching decision, but cooperation between the two of you will make it much better for everyone all-around.
For more information, or to request a copy of one of our books for Virginia women facing divorce, give us a call at 757-425-5200 or visit our website.