ADFP Greater Boston January 2014 Meeting
Thursday, January 9, 2014 from 12:00 PM to 2:00 PM (EST)
Please join us on January 9 at noon for our bi-monthly ADFP meeting. Diane Pappas, CDFA will be speaking about the "The Marital Home and Divorce". As we have all encountered, marital home issues are a key divorce emotional and financial issue.
Diane is one of the founding members of this chapter and a leading divorce financial planner in the Boston area as well as a trained mediator. She has deep experience with marital home issues. She will lead us through a case study that will highlight many of the home related financial issues faced by divorcing couples.
We will be applying for CE credit for this program.
The fact pattern of the case study follows:
You are given a draft separation agreement by an attorney and asked to review the financials. Under the property settlement section, it grants title of the couple’s main home to the wife via quit claim deed by the husband. She will also refinance the mortgage to remove his name after the signing of the agreement. It further states that the home will be placed on the market within 5 years when the youngest graduates from high school and net proceeds will be divided equally between the parties. The agreement also states the husband will move into the parties vacation home that they purchased together and convert it to his primary residence.
You learn that the main home was purchased 12 years ago for $425,000 and it is currently appraised at $795,000. They bought the vacation home 10 years ago and it has appreciated $300,000. He plans to sell it in the next 2 -3 years. What recommendations will you provide to the attorney?
Topics to be discussed:
• Buyout v. Sell
• Affordability and Financing options for buyout
• Analyzing future tax issues of buyout vs. current tax issues of selling
• Qualifying for a new mortgage
• New mortgage lending guidelines for 2014 – hot off the presses
• Cost basis and Capital Gains Exclusion
• Use and Occupancy rules – especially related to new ‘non-qualified’ use since 1/2009
• Timeframe to sell home – ‘pursuant to a divorce’
• Deductibility of mortgage interest and real estate taxes as alimony or as itemized deductions