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Dividing marital home value question

Katz13 posted 7/13/2020 16:17 PM

I'm trying to save legal fees and do the no fault paperwork myself. The only issue is how to divide the equity in our marital home. My WH is moving out. I just refinanced a few months ago. My name is the only one on the mortgage but both of our names are on the deed. I want to stay in the home until our son graduates high school in 2023. I don't have the money to pay my STBX his share of the equity now. I can afford the mortgage on my own. Can I put in the divorce paperwork that he will get his share of the equity when I sell the house in 2023? Am I obligated to pay him now? The only way I could do that is cashing out retirement savings and that would incur penalties.
Any advice?

barcher144 posted 7/13/2020 16:32 PM

My understanding is that you could probably do whatever the two of you agree to do... the "laws" around divorce are more for when people do not agree (within reason).

So, the answer is... what will your STBX agree to? I think that it's fair for you to establish the equity in your house and how much of that you would owe him and that establish a payment plan (I'd suggest that you will be required to pay him some interest too).

And I am not a lawyer, but my retirement cannot be cashed out EXCEPT during a divorce. I didn't quite understand it... so maybe you should look into that.

HalfTime2017 posted 7/13/2020 16:56 PM

Yes, if he agrees, you can pay him out in a set amount of yrs. Say 2023 is the yr you decide, he will get his share plus any appreciation. Thats up to you to negotiation. He doesn't have to get the appreciation, but you might offer that up, in exchange of him getting his half now. If I were him, I'd be asking for the appreciation, but again, thats up to you to negotiate.

Phoenix1 posted 7/13/2020 18:24 PM

You can put just about anything in the agreement you want, as long as both parties agree to it.

My DD went through a D about a year ago. Her ex moved out of the marital home and she stayed there (he actually moved out of state). The deed and mortgage are in his name. He agreed she could pay him rent and all utilities while living there, and whenever she/they sell (no timeframe) they split the equity 50/50 based on value at the time of the sale.

Not suggesting this is a set up for you with the rent and all, just to illustrate how some of these agreements are worked into the final decree.

You DO need to address the value, i.e., split it based on today's value (get an appraisal!), or based on future value at the time of sale. If you are paying the full mortgage then I would try to get him to agree to present value of the equity since you are paying for future value (unless the house valuation itself goes way up). Nail that down tight. You also need to address things such as maintenance/repairs, property taxes, insurance, etc. Who pays? Will he sign a Quit Claim on the deed? He may not want to in order to protect his interest.

Planetx posted 7/13/2020 19:26 PM

Are you the only one paying the mortgage? I would hate to have to pay my ex half of 3 years worth of mortgages he didn't contribute to. Would he agree to getting half the equity of the value of the home at today's value?

messyleslie posted 7/13/2020 20:57 PM

Our order is that the house will be deeded to me and I will make good faith efforts to refinance it every 6 months. When I sell the house, whenever that is, my ex will get 1/2 of what we determined the equity to be right now.

Tigersrule77 posted 7/15/2020 14:20 PM

I did something similar with my home when I divorced. XWW wanted kids to be able to stay in the home, so we set an amount that would be paid to her when the home was sold/refinanced. I was able to refinance about a year later.

Ratpicker posted 7/17/2020 21:57 PM

Katz, you stated "The only way I could do that is cashing out retirement savings and that would incur penalties" That may or may not be an avenue to pursue but you would not have to incur penalties if the funds in retirement accounts are divided with a QDRO as part of a divorce settlement. It stands for Qualified Domestic Relations Order.

It may not be a financial benefit to you to lose out on some of those retirement funds in exchange for his equity in the house. But it is a possibility without the withdrawal penalties.

homewrecked2011 posted 7/17/2020 22:36 PM

We also did a QDRO, and I highly recommend! My situation was reversed. XH had to pay me a certain amount out of his 401K. It was ordered to do this thru a QDRO. NO TAXES ARE OWED, NO PENALTIES ARE PAID, bc this is a legal transfer of funds. My atty filled out the forms, xh atty had xh sign sign them, the judge signed them, I signed them. It then went to xhís 401K plan administrator. They sent me a check. I could have stipulated the funds could go into an IRA at my bank, or to me.

Additionally, xh had to sign a Quit-claim deed to me. It was typed up by my atty, and xh had to sign. I went right to the TaX office in my county and had it filed.

Within a month, I was completely done with him, no further negotiations, etc.

All this legal stuff is done every single day, if you want to do it yourself, you might find it online. Also, see an atty. I found one that was going to do everything for $500.00. The only reason I didnít use him was bc xh tried to get custody of the kids and fight over everything. If you guys are in agreement, it might be good to have an atty handle it cheaply.

Edited to add: when I said no taxes are due on the withdrawal, no penalties, etc, thatís on your side. If your STBXH cashes out his check, instead of putting it into a retirement fund, there may/may not be penalties for him to pay. In 2012, the IRS told me that the year in which I get divorced, they donít charge the 10% penalty on the money my XH was giving me in the QDRO, even if I withdrew it. Not sure if thatís still the same.

[This message edited by homewrecked2011 at 11:12 PM, July 17th (Friday)]

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