Should I Sell My Home Before the Divorce?

[Pook075]

Hi everyone and thanks for reading.  Quick recap, I've been separated for 15 months, getting divorced in late February, and my BPD wife and I are on good terms.  The fighting has completely stopped and we're almost friends at this point (not quite, LoL, but we communicate well).

I could use some opinions.  I'm still in the family home, but I've been unemployed for about a month now and will struggle to make ends meet if I don't find a job in the next few weeks.  I have a big country home and my brother lives with me, contributing $500 a month.  There's also a cabin on the property and my BPD daughter lives there (contributing nothing).  My wife and I are divorcing without attorneys in a simple no-fault case, and I've agreed to pay off around $40k in her debt while I keep the house. 

The home itself is worth between $500-600k, possibly more in this market (5 bed/4 bath on 5 acres with 2 bed/1 bath cabin).  I owe roughly $280k so there's a lot of equity there, and I could choose to sell and split the profits with my wife instead of the other agreement we have.  We'd each walk with maybe $80-125k after fees, etc.

Now, selling would make my BPD daughter and my brother homeless...my brother can find a place to live quickly though.  Also, my parents built the cabin and lived there up until passing, so there's some emotional stuff involved as well.  I have accepted that I could walk away though and be okay with the decision since it puts me in a much better position financially.
I could also sub-divide the property during the closing and keep the cabin on maybe 1/2 to 3/4 acre, which would make me completely debt free and I could be comfortable there while planning the next stages of my life.

My typical earnings are around $100k a year, so I can comfortably afford this home as long as I'm working.  But at the same time, making $100k a year while debt free would be life-changing for so many obvious reasons.

The downside of doing this would be my BPD kid's wrath, which could be minimized I guess if I said that this was my only possible path forward.  The cabin is 850 sq/ft and there's no way I could live with her in that space and keep my sanity (she's way too messy, loud, etc).  Also, I could just wait until after the divorce finalizes and double my profits, but that doesn't feel right to me.

What would you do in this situation?  I will thank everyone in advance and there's no wrong answers here, I genuinely want honest opinions.

[Rev]

Simple question - what does your intuition tell you - when you close your eyes and you just permit yourself to let yourself listen to yourself?

[Pook075]

Simple question - what does your intuition tell you - when you close your eyes and you just permit yourself to let yourself listen to yourself?

Emotionally, I feel like I should stay.  It's my family home that the kids can always come back to.  It's also where we took care of my parents up until their passing, and the memories are priceless.  I also love the property, it's very unique and I'd never be able to afford something like this again.

Logically, I see the clear benefits of selling and basically be retired.  I'd still work and build savings for several years, because the opportunity is just too great.  For the first time in my life, I'd be working because I wanted to, not because I had to in order to make ends meet.

Emotionally, I want to take care of my wife and have a fair split.  Logically, she walked away and left me in a terrible financial situation, she doesn't deserve it.  Emotionally, I'm better than that...or maybe that dumb, LOL. 

I can literally go in circles all day long.

[Rev]

Emotionally, I feel like I should stay.  It's my family home that the kids can always come back to.  It's also where we took care of my parents up until their passing, and the memories are priceless.  I also love the property, it's very unique and I'd never be able to afford something like this again.

Logically, I see the clear benefits of selling and basically be retired.  I'd still work and build savings for several years, because the opportunity is just too great.  For the first time in my life, I'd be working because I wanted to, not because I had to in order to make ends meet.

Emotionally, I want to take care of my wife and have a fair split.  Logically, she walked away and left me in a terrible financial situation, she doesn't deserve it.  Emotionally, I'm better than that...or maybe that dumb, LOL. 

I can literally go in circles all day long.

So ... logically you would be well advised to let your emotions work in harmony with your thoughts?

Understand that if emotionally, which is a link to your value system, you are left with unfinished business, then your thoughts will eventually become untrustworthy.

We really don't know how to pray as we ought it says in Romans 8 - but the Spirit will intercede for us with sighs too deep for words.

Give this time to gel.  Pray into it. The answer will come.

Rev

[kells76]

Let me see if I have all the pieces in play here:

-You are currently living in Family Home (FH) (the "country home" you refer to) which you (will) own. Your brother lives with you in FH.

-This is on property (PT) that also has a cabin (CB).

-You are considering selling all or part of PT, FH, and/or CB.

-You currently work from home.

...

Does your daughter pay rent? If not, would her starting to pay rent change anything?

How does she do with longer timelines (i.e., I'm assuming telling her "you have to move out in 5 weeks" would not go as well as telling her "unfortunately due to finances, I have to sell the cabin by August -- it's difficult and I wanted you to be the first to know").

Is selling FH only (but not PT or CB) and renting something smaller in your nearest town a viable option?

Can you rent out FH without selling? How's your state on landlord protection?

[Pook075]

So ... logically you would be well advised to let your emotions work in harmony with your thoughts?

Understand that if emotionally, which is a link to your value system, you are left with unfinished business, then your thoughts will eventually become untrustworthy.

We really don't know how to pray as we ought it says in Romans 8 - but the Spirit will intercede for us with sighs too deep for words.

Give this time to gel.  Pray into it. The answer will come.

Rev

That was my plan- take the week to pray about it and hopefully find some inner guidance.  Opinions still help though, thanks!

[Rev]

That was my plan- take the week to pray about it and hopefully find some inner guidance.  Opinions still help though, thanks!

As usual Kells asks the right questions!

[Skip]

Do I understand this correctly?

If you sell now, you pocket $125K to $150K.

If you wait 100 days, you are looking at a $210-$260.

That's a good return.

If you need short term cash to get you to February, you could borrow it.

Renting out parts of the property and living in the cabin is another option.  In that case, house repairs are tax deducible and you have an appreciating investment. And you can move back in later.

From a financial perspective, you are lucky to have. the house. Your daughter and she would obviously be best served for you to keep the house (even if she starts paying some sub market rent).

[Pook075]

Let me see if I have all the pieces in play here:

-You are currently living in Family Home (FH) (the "country home" you refer to) which you (will) own. Your brother lives with you in FH.

-This is on property (PT) that also has a cabin (CB).

-You are considering selling all or part of PT, FH, and/or CB.

-You currently work from home.

...

Does your daughter pay rent? If not, would her starting to pay rent change anything?

How does she do with longer timelines (i.e., I'm assuming telling her "you have to move out in 5 weeks" would not go as well as telling her "unfortunately due to finances, I have to sell the cabin by August -- it's difficult and I wanted you to be the first to know").

Is selling FH only (but not PT or CB) and renting something smaller in your nearest town a viable option?

Can you rent out FH without selling? How's your state on landlord protection?

Yup, you have everything right.  Main house and cabin on 5 acres.

My daughter has good intentions and says she'll help out, then she'll ask to borrow money an hour later (which will never get paid back).  She's working part time at the moment and cannot financially contribute reliably, which I'm okay with since it's a good job for her and helps her remain stable.  If she could contribute, it may change something since it solves many problems at once (her younger sister and her mom insisting that I kick her out, for starters).

I could try to sell the main home, keep the cabin, then rent or buy nearby.  My wife and younger kid would be furious, however, and say that I'm enabling.  Maybe they're right, but my BPD daughter and I have a very healthy relationship.  She still makes poor financial decisions and is constantly on the run, which I don't think will ever change.  My wife is pushing me to take over her finances and pay her bills, while giving her an allowance (out of her own money).  While that would help in some ways, I think it would be detrimental more than anything.

I could possibly rent out the main home; I've never looked at that seriously.  Zillow says my house would rent for about double the mortgage price, although I can't imagine would could possibly pay that.  I think I'd be better off selling than trying to rent.

The retail rent for the cabin would be around $700-800 a month, and I've thought about forcing my daughter to move back into the main home so I could rent the cabin.  That would also save me the power bills over there since my kid can't reliably pay them, so there's close to a $1k swing there.  Renting the cabin plus my brother's rent are within $500 of the mortgage, so I could almost break even if my kid gave a few hundred per month.

[Pook075]

Do I understand this correctly?

If you sell now, you pocket $125K to $150K.

If you wait 100 days, you are looking at a $210-$260.

That's a good return.

You absolutely understand correctly.  The only question there is the moral dilemma; do I owe that extra to my wife after 23.5 years of marriage?  That's really where I wanted to hear others opinions because that's where I'm stuck.

[Pook075]

Thanks everyone for talking this out.  I realize you're making me do all the work, LOL, but it's helpful nonetheless.

[kells76]

You absolutely understand correctly.  The only question there is the moral dilemma; do I owe that extra to my wife after 23.5 years of marriage?  That's really where I wanted to hear others opinions because that's where I'm stuck.

One way to look at it is:

make the extra money. Just go ahead and do it.

After you make the extra money, then get some breathing room to think things through.

Maybe you set up a trust fund for your W's future care/expenses?

Maybe you use the extra $$$ to fund your BPDd's care/expenses, again through some kind of trust?

I don't see a downside to making more money and then pausing to think about what to do with it -- vs making less money and then never having the opportunity.

Unless there is some "deadline" associated with pocketing more money, where somehow if you do that, you are legally required to do something in a short time?

[Pook075]

Unless there is some "deadline" associated with pocketing more money, where somehow if you do that, you are legally required to do something in a short time?

I'm really not sure and I was wondering the opposite.  What if I kept the house for 6 months, a year, or whatever.  Then sold and wanted to help my ex-wife in some way.  Would that money then be taxed since she's no longer my wife?  I really have no idea.

I appreciate your overall advice though and you're probably right about putting myself (and eventually my kids) first by holding onto the house for awhile longer.

[kells76]

Then sold and wanted to help my ex-wife in some way.  Would that money then be taxed since she's no longer my wife?

So if you made (tossing out example numbers here) $100,000 from the sale, and gave her some part of that, would that gift be taxed -- i.e., would you be taxed for giving it, or would she be taxed for receiving it?

It seems likely that there is some ceiling for how much you can give a person as a gift and have it not get the attention of authorities. I don't know if that's $100, $1,000, $10,000, $50,000... but it's in there somewhere.

It may or may not be relevant that she isn't your W any more. I kind of think that the issue is more the amount you can give her (or give any person) at once without either or both of you getting dinged with taxes.

This seems well worth an appointment with a lawyer.

...

But I also kind of think it's a moot point. If she struggles with BPD, I wonder if it would actually not be very loving to give her cash with no strings attached?

It depends on your detachment, I think. If giving her $X is so that you can feel like you acted with integrity, then it "shouldn't" matter what she does with it.

If giving her $X is because you think she should use it to take care of herself, and you'd be upset if she blew it on BS purchases, then don't give her the money directly.

[EyesUp]

Hey Pook,

A few Qs.
- how do you know the D will be finalized in Feb?
- how do you know your BPD stbx won't change demands in the final agreement between now and then?  a lot can happen in ~60+ days over the holidays with any BPD...
- do you have signed stipulations or some provisional agreement?
- how confident are you that a judge will sign off on the agreement you anticipate signing, especially if it's not a 50-50 division of assets?
- are you under any financial restraining order until the D is finalized?  this sort of thing is pretty common, and would usually preclude a real estate transaction or stipulations that address exactly how the proceeds of the transaction are managed
- do you have an atty?  have your reviewed the options you shared here with the atty?

As I read through your scenario, these are some of things that came to mind.

If I were in your shoes, I'd want to be sure that most of this is well defined to avoid potential surprises in the next 60-90 days.

I think you've received some good advice here re: maximizing value by waiting.  It seems like that approach would also avoid some potential legal surprises that could come with selling sooner.

Wishing you the best of luck - whichever way you decide to go.

[GaGrl]

My advice is to NOT make major decisions until a year after life events -- divorce, death of a close loved one, etc.

Play out the uncontested divorce, get the new job, let life settle down.

(Gifts of $$$ are not taxed until about $15k or so.)

[Pook075]

Hey Pook,

A few Qs.

Thanks for replying and the advice.  We have a final court date late February, and we both agreed to the terms of splitting assets ourselves through a no fault divorce.  In my state, the person who takes the lead submits the agreed terms to the court and the other one has 30 days to contest it.  That's why I ultimately decided to file myself and keep things in my control.  My wife replied to the court (I helped her with the paperwork) and did not contest anything, so they issued the final hearing date.  From what I've read, it's more of a formality than anything since we're both in agreement over property, items, money, etc.  There are no formal agreements that we had to submit in my state.

If my wife changed her mind, then the no-contest divorce would be dismissed and we'd have to hire attorneys.  I'm not sure if it's too late for that or not, or if me getting laid off last month could affect anything.  I also don't know if the judge can reject the proposal of asset splits if both of us agree.  I guess he or she could, but I really don't know.  Alternatively, he could ask for me to provide substantial alimony.  My wife did not request it.

Finally, I do not have an attorney since my wife was civil and I didn't want to encourage her to take on more debt (that I'd end up having to pay for).  We both just want to end this and there's not a ton of assets or anything; mainly just the house/cabin (all one property) and a few vehicles.  Anything else she wanted, I told her to take and enjoy since I refuse to fight over "stuff" that neither of us actually need.

[Pook075]

My advice is to NOT make major decisions until a year after life events -- divorce, death of a close loved one, etc.

Play out the uncontested divorce, get the new job, let life settle down.

(Gifts of $$$ are not taxed until about $15k or so.)

Thank you, I appreciate your input.  It seems opinions are leaning that way.

[Turkish]

The gift tax limits per the IRS are $18k for 2024. You could put the balance for your wife to be paid later into as of now high rate CDs, or I-bonds though the latter requires holding for 5 years without incurring a small penalty by losing the previous quarter's interest. I'd consider any capital gains you might be liable for depending upon your state or province.

From what you describe though, it sounds like a dream property and I'd try to hold onto it and hopefully you'll find employment soon.

I also get the desire to be free as well...

[Goosey]

I kept the house when things imploded.
  She left years before. We didn’t have a conversational relationship at that point.
    I bought her out for less then half the equity but in retrospect had to clean up/pay off all the other debt I didn’t know about after she was gone and I actually walked to the mailbox. 
   My bad. Cowed.
   Anyways. It was an emotional thing for me. I love this couple acres. Our daughter still lives here with me and another We got pets still from before the implosion. Ya I equity and I could sell it. But then what? 
    We all want a roof. I’m happy to have one, luckier than a lot.
 

[SaltyDawg]

My advice is to NOT make major decisions until a year after life events -- divorce, death of a close loved one, etc.

Play out the uncontested divorce, get the new job, let life settle down.

Pook,

   I am with GaGrl on this one.  I too would recommend not making any rash decisions until a year or two after life events, in your case it is divorce.

   Being mindful that you have a daughter that benefits from your care, and you are a care-taker/giver.  You are trying to care-take/give your wife, who is divorcing you, who has chosen to no longer be a care-giver to you.  It should be a mutual arrangement.  I have seen enormous changes in what you have shared and your attitude in the past year, and this may change again - wait until things have settled down to your 'new normal', which I don't think has happened yet as you have posed this question, and then follow your gut, after your 'new normal' is no longer 'new', generally speaking a one to two year process.

   Take care with self-care.

SD

[Notwendy]

It looks like you have an agreement already- you pay a debt and you keep the house. Selling the house seems to change this for you, and you feel obligated to share some of the proceeds. IMHO stay with the original agreement and don't change it. From what I have read- it seems your wife earns a decent living and you are seeking a job. She's going to be OK. Take care of you and your brother and D. Keep the house as per your agreement.

I also agree with the others to not make a change during a time when emotions are running higher. This would impact your brother and your D and create more emotional reactions and issues with your D. You have enough to deal with already without that.

The house is also sentimental to you. It's familiar to you and your family and that is a comfort for you.

I am imagining something creative with the house at a later time. You might not need as large a place but it might be a rental or vacation home on Airbnb/VBRO? You might enlist your D as manager or help decorate it- some kind of productive work for her- which helps her too? All this can be decided later- but you can still own it and possibly have it be an income source after the divorce is settled.



 

[Gemsforeyes]

Hi Pook-

I’m sorry if I missed this detail, but who legally owns this 5-acre property?  Am I correct in thinking that the property was in your family prior to your marriage?

Is your stbexW on the deed and/or the existing loan?

I have very specific reasons for my questions…

Before my divorce, I made the worst financial decision of my life in allowing my exH to somehow convince me he had more of a “right” to our marriage home than I did.  Over our years in that home, I had invested significant funds in the home and he had not.

I did this without legal representation and it represented financial coercion after his physical assault against me, and I still don’t understand what I was trying to *prove* in just rolling over and playing dead.  It was an exceptional country property and I loved it.  The decision I allowed and the transaction I actually facilitated for him left me in a financial mess from which I will never recover. 

Please do not make the same mistake.  You don’t have to prove you’re a good and forgiving guy.  If you can avoid it, make no promises or agreements at all other than those your stbexW seems to have (hopefully) already accepted.  And then sit tight, as others as suggested, until you can decide without emotion.

I’m sorry.  I hope this doesn’t sound odd.  It’s late.

Warmly,
Gems