Be careful when dividing assets, or it could cost you!
Dividing assets in a divorce can be tricky, especially when it comes to property you’ve owned together. The story below, from a Reuters article, illustrates just one of the tough situations you could wind up in if you’re not careful:
When Rick Buchler and his wife split up two years ago, they decided she would remain in their house near Stockton, California, and he would leave.
The couple had no children, and Buchler’s wife, a pediatrician, wanted to stay in the marital four-bedroom home with an in-ground pool since she could manage the mortgage payments.
“The divorce settlement said specifically that I am no longer liable for the home,” Buchler says.
His bank didn’t see it the same way. When Buchler, 40, applied for a loan a month ago to buy a condo in downtown Chicago, he learned that his name was still on the mortgage – despite deeding the title to his ex and giving the mortgage lender a copy of the divorce settlement.
“I was told that my ex had to reapply for a different mortgage under her name only – for a nice $5,000 in additional fees,” says Buchler, who recently started a consulting business.
The laws surrounding property and divorce are complex, especially when you factor in the tax considerations that accompany ownership. Of course, if you can’t agree who gets what, things get even more hairy. Make sure you ask your divorce lawyer about your options when it comes to dividing your assets, and always do your homework before finalizing any deal!