The American Dream Heads South
For many unhappily married couples, the so-called American Dream - home ownership - is a waking nightmare. For these unhappy individuals, the marital home, which is often the largest asset a divorcing couple divides, now becomes a prison "that neither spouse can afford to maintain, and that they cannot sell for what they owe."
Once upon a time, divorcing couples enjoyed the bittersweet consolation of dividing a home that had appreciated during their ownership as well as easy mortgage funding for the purchase of a replacement home or the refinancing of an existing mortgage. No more.
The collapse of the housing market makes the disposition of the marital home very much a problem. Moreover, with nearly one in six homes "underwater" -- that is, the mortgage is greater than the market value -- the traditional divorce regime has been turned upside down. Divorcing spouses "used to fight about who gets to keep the house. Now we fight about who gets stuck with a dead cow," said Gary Nickelson, president of the American Academy of Matrimonial Lawyers.
More than other assets, the marital home often becomes charged with emotional static because it becomes emblematic of the marriage, which is now a bittersweet memory of what was but is no more. When disposing of a house in a divorce (or even buying one as part of a happy marriage), people should remember a caveat: think house, not home. A home is a state of mind and a habit of the heart; the house is a box on a piece of land. The word home is warm and fuzzy; the word house is cold and angular. No one ever really buys or sells a home because it is made by the people who live and love and nurture each other there. Anyone can always buy a house because a house is just a box. Sadly, the home dies with the divorce or, happily, moves with the intact couple that goes elsewhere. The house stays where it is.
In the emotional tidal wave of a marital collapse, people, particularly a woman who loved and nurtured her children in the marital home, sometimes grab at the house. The collapse of the market raises a thorny consideration for divorcing mothers who want to keep the marital home. Courts frequently award the family home to the custodial mother, but a woman who accepts it as her share of the marital estate should think very long about the deal. Even under the best conditions, a house is a barren asset; it pays nothing until it is sold. The Great Recession has made this economic equation even more difficult: no one knows how far the housing market will sink. In some parts of the United States, houses have lost 30 percent or more of their value since the peak of the housing boom. And in places where the housing mania ran wildest, the bottom - the point where housing prices level - is not in sight.
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DATE OF SEPARATION – Depending upon the laws of the state of residence, the Date of Separation – called the DOS – has a profound impact on the eventual division and distribution of property and debt, including credit, pension benefits, and other marital assets. As of the DOS, the separated spouses are now in limbo legally and financially and remain so until the actual Date of Divorce. A great deal of money may be at stake. For example, one spouse may share responsibility for any debts incurred by the other; the value of a retirement plan or other marital asset, such as residential property, may fluctuate, often by thousands of dollars.
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