Negotiations for the Right Reasons in Divorce

Sometimes divorcing people seek to covenant certain assets for the wrong reasons, typically fueled by anger.  "She cheated on me so I want her favourite......"(fill in the blank) is common.  When looking at the financial aspects of divorce, however, emotions should be negated in favour of logic.  Easy to say and hard to do, I realize.  I know my example is stereo-typical but all too often this is the scenario.  Wife wants to keep the house.  Why?  One reason is the way that women perceive money.  Studies have shown that women equate money with security.  A house has bricks and mortar and it provides shelter, after all.  Another reason may be that she does not want the children to experience too much change, all at once.  Dad is no longer at home and changing schools and the pressure of creating new friendships may prevail.  Although this reasoning may have a lot of validity, is it reasonable.  Maybe the house means a lot to him and she is angry but can she afford to keep the house?  Will she deplete all her assets held outside of the home to try to keep the house, finding out a few years later that she is house rich and in debt?

Maybe more logical choices are available keeping in mind the reasons stated for wanting to keep the house.  Perhaps less costly housing alternatives are available in the same neighbourhood so that that kids can go to the same school and have the same friends.  Maybe the newer housing alternative may be a benefit from other points of view like, no memories of married life and less upkeep.  Perhaps less expensive housing alternatives can also give her the opportunity to save for retirement, as well.

 In my example, I talked about the wife wanting to keep the house but men have other challenges in their financial decisions, especially if they are paying child and/or spousal support.  A little less often but becoming more common place that in past years is the issue of the wife paying support to her husband, especially since women have been advancing in their business careers and the same types of issues need to be considered in this scenario.  

The power of the financial neutral in a divorce situation is to draw out these conclusions before the financial errors are set in motion.  Often clients do not want to pay an additional professional (other than their lawyer) to help with the divorcing process but my argument is, "How can you afford not to?"