4 days ago
Living apart together or bird nesting? Divorce in a tough property market
Auckland divorce coach Bridgette Jackson
Photo:
Equal Exes
A slow property market is making it harder for some couples to separate - and divorce coach Bridgette Jackson says it's just one of a number of financial hurdles she is having to help clients through.
Part of the problem was the wider economic environment, she said.
"Financial stress is huge. That has a huge impact on people's relationships - people losing jobs, liquidation of companies. We're right in the thick of that now, aren't we?
"The increase in unemployment is massive."
But she said there was a clear trend towards people remaining in the same house, even when they had split.
"I work with many, many couples and individuals and I'm seeing so many people who are living in the same property because they cannot afford to separate.
"People just simply can't afford to move because it's usually their biggest family asset … when you can't sell a house it's really deciding that you're going to work together because you are potentially going to be stuck in the same house for a certain period of time.
"Then looking at whether or not one of you potentially stay in the home or you both bird nest."
'Bird nesting' refers to couples taking it in turn to be in the family home with the children. Jackson said that needed to be planned carefully. "Whether it's staying with friends and family, what does that look like?
"If you're not able to sell your house, what's plan b? Is someone going to stay in the house or are we going to get tenants?
"There are many, many people in that position of living apart together, as we call it."
She said that was particularly tough when the split was not mutual.
"If one of you is the initiator of the separation and one of you is the receiver of the news … the receiver of the information … has got to cope with the acceptance that, actually, their relationship's over, it's out of their control."
Cotality data shows that the number of people moving from one owner-occupied property to another is down compared to normal levels of activity, which may indicate a reluctance on the part of homeowners to sell if they can avoid it.
They represent about 26 percent of the total transactions at the moment, compared to 30 percent in 2021. In Auckland, they are 23 percent, while first-home buyers are at 29 percent.
Many people who bought their homes in recent years may have lost most, if not all, of the deposit they put into the purchase. Prices are still about 16 percent below their peak.
David Cunningham, chief executive at mortgage advice firm Squirrel, said he had dealt with couples deciding to stay put even though they had broken up.
"I saw one last week … My opinion is that, generally, it's better to bite the bullet and move on.
"Squirrel's view is that property prices aren't about to materially lift - in fact, the dynamics are there for prices to move broadly with inflation over the decades ahead rather than the 6 percent of the last 30 years which was fuelled by falling interest rates."
Jackson said there were a number of other things that often caught people out when they were divorcing.
She would work with clients to put together a memorandum of understanding to form the basis of a separation agreement, would then go to lawyers for advice and certification.
People sometimes struggled with how childcare should be divided, she said.
"Is it 50-50? What does that look like, is that going to work for all of you? We understandably find this with women who are generally the caregivers that they tend to not want to see their children 24/7 and I completely understand that.
"So really working through and making sure that children are the priority … there is an interim parenting agreement put in place and then something more permanent but just having regular reviews in terms of that to make sure that it's working for the family."
She said there were often still serious economic disparities between men and women, particularly if the woman had taken time out of work to bring up the children, to allow a partner to focus on work.
Sometimes the other party did not acknowledge the sacrifice.
"I see a lot of instances where … the other partner maintains that it's not aligned with their career, accelerating, excelling. So you know that certainly ends up being an issue of contention in quite a number of cases.
"Another mistake that people do make through this process is giving up the family farm, so to speak, because they think that their next relationship's going to give them everything they want."
She said people looking for a lawyer should be prepared to ask questions about how much it would cost, who they would be working with, and what style or approach would be used.
"I think that's a piece that isn't thought about because you know 'so and so said the neighbour had so and so lawyer who, you know, was a bulldog''... So everyone's scenario is completely different. It might be not the right approach for you."
She said people who tried to make decisions when they were emotionally disregulated could end up worse off.
Sometimes people who were dealing with someone who had a high conflict personality would choose to walk away with a bad deal because they just wanted to be finished with it.
"One of the biggest things I see in my practise is 75 percent of women having no idea about their finances, which is huge.
"You know, everyone needs to know what they own and owe, because if you end up separating, the last thing you want to do is have to get a court order to get transparency of your assets and liabilities.
"I think also every woman needs to get a job, whether it's a something they do voluntarily or always keeping their hand in something because your relationship's not guaranteed, and I think we see a lot of women putting their heads in the sand and thinking well, she'll be right. Well, she won't be right, you know."
She said she was seeing a lot of "women walk away" syndrome where women who were tired of "doing everything and not getting anything in return" left a relationship, and people separating later in life. "Older people think … 'I've only got 20 summers left, I'm out of here'. We see a lot of those now, the older age group now separating."
It was often difficult for people to get back on their feet financially at that point, she said.
"Particularly if you're the female and you haven't worked and you know and you're sort of 65, 70, what that looks like, but yeah, we definitely see more and more of that."
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