Thursday, September 18, 2008

Dividing a House

Dear Famularo & Associates:

My father-in-law has an attorney and has been trying to finalize his divorce for the past two years. Last week he went to court and the intentions were to get his wife to agree to a sale price for their home. Instead she offered to buy him out. He didn't accept because the offer was about $20,000.00 lower than he would receive if they put the house up for sale. My father-in-law can't get his wife to agree on anything and he would even be willing to take the lower amount if she would agree to waive spousal support and to not touch his retirement. Is this possible to do?

My father-in-law is filing bankruptcy tomorrow and is barely getting by financially. He needs to sell the house so he can move on. They have had three offers in the past year, but they have lost every sale because his wife won't respond to the offers in time. The first offer a year ago would have given them around $50k more each. She also has the family pictures and will not part with them. My husband would like his childhood pictures and she won't give them to him. Is there any way to get them legally?
-CS in Temecula


Dear CS:

It sounds like your father-in-law has multiple issues he is dealing with in this divorce. First of all, your father-in-law needs to get his lawyer to request a trial date if his attorney has not already done so. Riverside county is one of the fastest growing counties in the nation, and, as a result, there are not enough judges to hear all the cases in this county. If a divorcing couple cannot resolve the terms of their divorce on their own, they must wait many months for a trial date. There are only ever two ways to resolve a divorce action: either the parties settle or they litigate. This case will have to be litigated, which means waiting for that trial date.
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In the meantime, the real estate market is falling. An asset such as a house will be valued at time of trial. So, even though the house was worth an additional $50,000.00 a year ago, the value of the house will be calculated on the day of the court trial, unless your father-in-law requests an "alternate valuation date." Your father-in-law can make a motion claiming that he and his wife had the ability to sell the house for more money a year ago, but his wife refused to cooperate with the sale of the house. If your father-in-law can show that he lost money as a result of his wife's failure to cooperate in the sale of the home, the court can force his wife to buy him out of the house at the higher amount.

When your father-in-law decides whether he should allow his wife to buy him out of the home or list the house for sale, he must keep in mind that if he sells the house on the open market he will have to pay realtor fees and escrow costs. If his wife buys the house from him instead, she must pay to him his full share of the equity. His wife cannot deduct realtor fees or escrow costs from the purchase price just because the parties would have had to pay that money if the house was sold to a third party.

You ask whether your father-in-law and his wife can agree that he will not pay spousal support or that she will not touch his retirement. The answer is, "yes." The parties can, among themselves, agree to almost anything. The court will not interfere with the parties' agreement unless it is against public policy or the parties cannot reach an agreement by themselves. Even though the law may require your father-in-law to pay his wife spousal support and give her half of the community interest in his retirement (one-half of the amount he earned in retirement monies during the marriage), if the two of them agree to something else, the court will not interfere with that agreement.

If the wife requests spousal support and will not agree to waive her right to receive it, the court must determine whether she is entitled to receive spousal support by examining a number of factors. The two most important are your father-in-law's ability to pay spousal support, and his wife's financial need. If your father-in-law filed bankruptcy, it may indicate his inability to pay support.

When a spouse separates in anticipation of a divorce, it is always smart to take all precious and irreplaceable items with him or her. Otherwise, that spouse runs a huge risk the items will never be returned. As for your husband's childhood photographs, the court will certainly order the wife to return those irreplaceable items to the family. Unfortunately, things have a way of getting "lost" or "stolen," or of even never existing in the first place. If the wife has not already returned those items to your husband on her own, chances are she has not done so out of spite. She will probably deny she has any pictures if she is asked. Your father-in-law should have his lawyer ask for them back, however, if she claims she does not have them, the photos will be nearly impossible to recover.

-- Famularo & Associates

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