Keeping the Marital Home in Divorce and Pitfalls for the Unwary
by Mary Salisbury
Supporting Effective Agreement
Keeping the marital home in divorce and pitfalls for the unwary.
In most marriages there is a marital home and it’s often the largest, or one of the largest assets. Particularly if there are kids, in divorce, one spouse often wants to keep the marital home.
There are pitfalls for the unwary in divorce as it relates to the marital home that can arise long after the mediation has been completed. As mediators, we can provide the service of advising our clients so they can avoid these pitfalls that could create bitter feelings towards their ex plus end up affecting their financial life for years to come.
I’ve had more than one phone call from folks seeking help because their settlement agreement said the ex-spouse got the house and would refinance but that was not happening. Meanwhile, they were stuck in an apartment, because they were still on the marital home mortgage. Even worse, their credit was taking a hit because the house spouse was not making mortgage payments.
As mediators, we do our clients a service by inquiring about the ability to pay a mortgage, explain these pitfalls to our clients and recommend that the house spouse get a commitment letter from a bank prior to finalizing the settlement agreement.
-The husband is insured and the wife is a beneficiary. (This is often done this way because a spouse has lower credit scores.)
-They get divorced and wife keeps the house. No changes are made to the policy.
-A storm happens and a tree falls resulting in a $6,000 repair.
-Wife goes to file a claim but because she is a beneficiary, the claim is declined or the money is sent to the husband because he still shows as the insured.
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Michael Lodge is a Nationally Certified Professional Mediator specializing in business disputes, as well as family conflicts. He has written three books and hosts an international podcast on IHeartRadio and other podcast media stations.