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Is it normal?
To have divorce contingency plans?

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33 replies to this topic

#1 KatakaGeoGirl

Posted 23 November 2012 - 09:00 AM

We're hoping to buy a house in the next 12 months with my BIL.  So yesterday when going through some details he mentioned the big if we ever get divorced this could be how it could work etc.... he's got like the entire scenario sorted 'just incase'. He said not that he thinks there is any reason to because things are happy. But this is coming from someone who I thought didn't even believe in the 'D' word. Perhaps it was BIL who bought it up, coz he's going parts in with it he wants to know what would happen if that did happen. Which is fair enough.

Do you have divorce contingency plans?

Do you think it is normal?

#2 *LucyE*

Posted 23 November 2012 - 09:03 AM

No, I don't think it's normal.

Maybe sensible to have contingency plans though.  Same as if one of you were in a serious accident/whatever.  

What sort of contingency plans was he thinking about?

#3 Feral_Pooks

Posted 23 November 2012 - 09:04 AM

Yes it is absolutely normal, especially with big financial moves like that.

After experiencing an end to a previous de facto relationship and the suddenly death of my father, I always have a plan of what I would do should either happen with my DP. Having a child makes this even more important, IMHO.

#4 ///

Posted 23 November 2012 - 09:09 AM

So you are investing with your BIL. Then it is a business transaction and he needs to protect himself and his asset from the potential fall out of a divorce. Very very sensible thing to do.

#5 Bart.

Posted 23 November 2012 - 09:11 AM

I don't know if it's 'normal' or not but it certainly should be something everyone considers.  Given the frailty and uncertainty that is life, all contingencies need to be discussed as possibilities.  I have thought many times what would happen if I didn't have DH for whatever reason.

#6 Mamabug

Posted 23 November 2012 - 09:14 AM

Even without a third-party investor involved, Himself and I have a divorce contingency plan in relation to our debts... who gets what and who pays for what, etc blush.gif

If I was BIL and investing with a couple, I would have asked this question, so perhaps that is where it has come from.

#7 ~Nic~

Posted 23 November 2012 - 09:14 AM

I don't know if it's 'normal' or not, but no - DH and I never talked about what would happen if we ever got divorced. We do have life insurance etc, so we do have plans if one (or both) of us died though.

To be honest, I don't really see the point in thinking about it for two reasons... one, because I don't want to think about us splitting up and I would hope it wouldn't happen, but more realistically, the second reason would be that there would be too many variables to consider. If we have have split up before we had kids, we would have needed a whole different contingency plan to what we would need now that we have three young kids, and that would be a different plan to the one that we would need in the future when the kids are older, or have moved out. Too many different factors would just make it too difficult to come up with a realistic  contingency plan for all scenarios I would think.

#8 mez70

Posted 23 November 2012 - 09:16 AM

I think when you are investing finances in a high value and long term thing be it business, house, or other assets it is a very wise thing to have in place..... This protects all parties if something happens 10,15 even 20 years down the track.

I would say this has been suggested to him by not only friends but financial advisors and poss even legal advisors..

It is different to me and hubby buying a house as it is only him and I and if the worst were to happen it is only us it affects, a third outside party brings in a whole different bunch of possibilities..

#9 Mpjp is feral

Posted 23 November 2012 - 09:18 AM

Your BIL absolutely SHOULD think about these issues and discuss them with you. Divorce isn't rare, it happens to the best of us!! And if you aren't prepared to respect him for his courage in bringing up a difficult topic then you SHOULD NOT BE BUYING with family!!!

It's not like your DH brought it up....

Edited by meplainjanebrain, 23 November 2012 - 09:18 AM.

#10 mindy05

Posted 23 November 2012 - 09:18 AM

Isn't having a prenup agreement the same thing?

#11 Funwith3

Posted 23 November 2012 - 09:19 AM

I don't think its a matter of being normal... its just realistic. Half of marriages end in divorce so its definitely smart to discuss it.

#12 Mpjp is feral

Posted 23 November 2012 - 09:21 AM

QUOTE (~Nic~ @ 23/11/2012, 10:14 AM) <{POST_SNAPBACK}>
I don't know if it's 'normal' or not, but no - DH and I never talked about what would happen if we ever got divorced. We do have life insurance etc, so we do have plans if one (or both) of us died though.

It's not her DH - it's her BIL who is buying a place with them.

I'd be SHOCKED if his legal or financial advisors didn't inform him that he should talk about it!

QUOTE (mindy05 @ 23/11/2012, 10:18 AM) <{POST_SNAPBACK}>
Isn't having a prenup agreement the same thing?

With your dh - not with your BIL!!

#13 KatakaGeoGirl

Posted 23 November 2012 - 09:39 AM

QUOTE (meplainjanebrain @ 23/11/2012, 10:18 AM) <{POST_SNAPBACK}>
Your BIL absolutely SHOULD think about these issues and discuss them with you. Divorce isn't rare, it happens to the best of us!! And if you aren't prepared to respect him for his courage in bringing up a difficult topic then you SHOULD NOT BE BUYING with family!!!

It's not like your DH brought it up....

Settle gretal! It was my husband who bought it up. I was only guessing it might be BIL who prompted DH to talk about it. We're only just talking it through for now... haven't been to legal means etc.

ETA we weren't planning on buying so soon, except we heard recently that the landlord of the house we are renting broke up from her relationship, and I know she was financially dependant on him. They were only a partnership so I'd say she'll be starting again. Originally when they were a couple our house was secure as a rental. So we're personally just making our own contingency plans if this did happen (that she wants her house back) which honestly I have a gut feeling will happen when our lease ends in Feb next year.

So DH called BIL to lay it on the line to say what he really does want to do, so we can start looking at options and make sure we're not left houseless next year... if the worst should happen.

I wasn't objecting to it - I was just asking really if you thought it was normal. Which as you point out probably came out of the discussion with BIL (I wasn't around when the discussion took place) and DH's comments came out of left centre.

Edited by Katakacpk, 23 November 2012 - 09:42 AM.

#14 Beancat

Posted 23 November 2012 - 09:48 AM

Its totally reasonable its a business transaction.  I assume you are purchasing the property as tennants in common rather than as joint purchasers?  If you purchase as tennants in common you will have shares in the property (usually equal but you can define others) then if there is a divorce one of both of the other parties can buy out one of the people who may not want to be involved or your BIL could even buy both of your shares.  That way you dont have to sell the property and incurr the usual transaction costs.  Speak to your solicitor about it.

#15 Let_it_Rain

Posted 23 November 2012 - 09:55 AM

Sensible in my opinion.

My MIL and FIL bought a property with the assistance of MIL's brother I'll call him Bob.

Bob put most of the money in and MIL and FIL did the work and did the exisiting accom up. The agreement was that he get the money back when the property sold (whenever that may be).

19 years later MIL ended up leaving FIL and wanted what she considered her share of the property to fund travel. FIL did not have the money to buy her out and he did not want to leave because the property is also his livelyhood.

It could have ended up very badly for him, except Bob ended up giving MIL cash and increasing the amount owed to him when the property is sold. Most people would not have the money to do this and I guess it would also be unusual for someone to want to remain so heavily invested in the ex-BIL.

FIL has not been willing to disclose the exact arrangements with DH so we are not sure what will happen if he passes away.

#16 PatG

Posted 23 November 2012 - 10:17 AM

QUOTE (Funwith3 @ 23/11/2012, 09:19 AM) <{POST_SNAPBACK}>
I don't think its a matter of being normal... its just realistic. Half of marriages end in divorce so its definitely smart to discuss it.

Where is your evidence for this "fact".  I believe it is closer to 1/3 in Australia.  


However most stats are listed as per 1000 people so it isn't so simple to work out.

Regardless, business decisions should certainly try to encompass all possible eventualities.

#17 threeinnyc

Posted 23 November 2012 - 10:22 AM

I think your BIL is just being super careful; we know doing business with family member can be tricky (no no in my book!), good on him really.

DH and I don't talk about divorce and stuff, but we do have insurance savings etc to protect ourselves.

#18 MrsLexiK

Posted 23 November 2012 - 10:26 AM

I think it is normal.  I also think it is smart.  But I count on one hand how many people in my family are still in their marriage or defacto relationship. DH thought it was stupid - but he can count on one hand how many people he knows who are divorced.  So we are coming from different ends of the spectrum.

#19 Feral-as-Meggs

Posted 23 November 2012 - 10:31 AM

I think it's normal and sensible.  

My sons godparents bought an investment property with another couple who got divorced and had to sell their share.  They had an agreement that they had to have the property valued by 3 valuers, take the average and give first refusal to the other couple for 3 months while they got their finances sorted.  If the other couple didn't want to buy them out, then it had to go on the market.

You don't want to be forced I to a position where you have to sell in a bad market, or you want to get bak your equity and can't.

#20 Bel Rowley

Posted 23 November 2012 - 11:36 AM

QUOTE (JECJEC @ 23/11/2012, 10:09 AM) <{POST_SNAPBACK}>
So you are investing with your BIL. Then it is a business transaction and he needs to protect himself and his asset from the potential fall out of a divorce. Very very sensible thing to do.

I agree. I wouldn't want to essentially gamble on the strength of someone else's marriage.

#21 Al.Packer

Posted 23 November 2012 - 12:24 PM

We have discussed divorce with our Financial Planner - it's a very realistic thing to do in our opinions.

Just like we have discussed death, total and permanent disablement etc.

#22 Guest_Maybelle_*

Posted 23 November 2012 - 01:05 PM

I think it is sensible to discuss this and make some plans, but like many sensible things it is not the height of fun.

Good luck.

#23 YodaTheWrinkledOne

Posted 23 November 2012 - 03:24 PM

QUOTE (Poet in New York @ 23/11/2012, 09:13 AM) <{POST_SNAPBACK}>
He sounds sensible to me. If DH and I were investing in a property with another couple, I'd definitely want contingencies in place to cover that partnership not surviving the term of the investment.

totally agree with this.  It's a huge investment, makes sense to cover all possible common scenarios, such as death or divorce with other investment partners.  t's a bit naive to simply say "well, it won't happen ..."

#24 SeaPrincess

Posted 23 November 2012 - 03:32 PM

We don't have a divorce contingency plan, but we're also not buying property with anyone else. I think he's being very sensible as well.

FWIW, I have 2 female friends who bought a property together many years ago when they were both single. They had a contingency plan for if something happened and one wanted to get out and the other didn't.  They both say that the only reason they are still friends is that they had a plan in place.  I wouldn't want to jeopardise a family relationship in that way either.


#25 Guest_- Poppy -_*

Posted 23 November 2012 - 03:36 PM

Alarms bells, red flags!

Not normal at all.

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