Many couples considering divorce are worried about what it would mean for the family finances – both the cost of divorcing and of living separate lives, with separate utility bills and especially separate rent or mortgages to pay.
Divorce mediators can help to keep costs down; we work with couples to reach a mutually agreed divorce settlement which you can then take into court, rather than asking a judge to decide on dividing your finances and assets.
But when it comes to your biggest asset – the family home – there are several issues to be aware of, especially when considering the emotional investment many people have in their property, on top of the financial investment.
What to do with the house in divorce?
It’s one of the biggest questions, but it’s also one that can be resolved quite early on and removes a lot of the worry from the rest of your separation, so it’s worth tackling it head-on.
Some of the options include:
- Both partners move out, the property is sold and proceeds shared.
- One partner stays in the property and buys out the other partner’s equity.
- One partner stays and the other retains a stake that is bought out when the property is next sold.
- You agree to keep the property under its current ownership, e.g. if you have young children and don’t want to disrupt their home life.
A major factor in the decision is whether you have enough cash savings to afford a second property for the partner who will be moving out, as this makes it less pressing to sell the current family home and split the proceeds.
If you have children
It’s important to think about what is best for your children, especially if several of the above options are potentially open to you.
Divorce mediators can speak with your children to find out what they would like to happen, in a safe setting where they may feel more able to express their views.
This can uncover information they might feel awkward about telling you directly – for example if they have a good relationship with both parents, they might feel guilty about wanting to live primarily with one and not the other.
Mediation is a way to make young people’s voices heard during divorce, so that you can make long-term preparations that better reflect what they believe will make them happy.
Protecting the family property
Importantly, divorce mediation aims to resolve issues amicably, quickly and without unnecessary stress or cost incurred.
Compared with acrimonious divorces that go through lengthy court proceedings, this can save substantial sums of money – and in turn, protect the equity you have in the family property.
Ultimately if you plan to live completely separate lives, you may need to downsize or one partner buy out the other’s equity so they can go and rent or buy somewhere else.
Finally, if there’s not enough left in the bank to allow this, you could consider getting a guarantor – a parent, sibling or even a wealthy friend who is willing to support you during your separation – to help you over that first financial bridge to an independent lifestyle in a new home of your own.
Contact us today if you are thinking of divorce but are worried about what will happen to your finances.