Why the House?

Occasionally I talk with different financial advisors and we often hear about different couples who think about divorce. More often than not, the lower income earner of the couple requests to have the house. The question that goes through my mind is why? Some people seem to think they have not “won the divorce” or are not secure unless they get the house. To many the house is the prize, a trophy of sorts that says I am the one in the right and the other person is gone. Though I realize emotions may lead one to feel that way, the financial reality will often suggest that nothing could be further from the truth. The house is more than likely an albatross around the lower income earner’s neck.

The house after the divorce is too large for the individual once the couple has split. It requires more costs in terms of upkeep, etc. than they would have most likely had if they had looked for a place on their own. The house is not liquid. Last time I checked people’s homes are not made of gingerbread nor other edible material. In short financially, the house is more likely a gold-plated ball and chain rather than an asset that allows the person to move on with their lives after what may be a painful emotional experience.

Some of you may be detecting my belief that the personal residence is probably one of the last things one should desire in terms of assets should one try to divvy up assets for a divorce. Personal property probably goes lower than the house on my list. If one is out to “win” in the divorce game, go for the assets that are more liquid and have income producing value first.  The other person is stuck with assets that very well may cost more to maintain and does not give them nearly the flexibility to move on with their life. Offhand, that does not sound like a good scenario to me.

As always, please send your questions and comments to info@objectiveplanningllc.com.