A divorcing parent with limited assets, a chronic illness, and a child at an expensive private school faces an affordability gap after moving out. The parent can potentially extract about $70,000 in home equity and is considering letting the ex keep that amount in exchange for committing to pay a larger share of the child's tuition. The choice requires balancing immediate monthly cashflow and savings against retaining a lump sum for investment or tuition payments. Professional legal and financial planning advice is recommended to evaluate tax, custody, asset-division, and long-term health-related cost risks.
"I'm going through a divorce, and parts are bitter. The divorce is not my choice, and I never envisioned this as a possibility for my future. My soon-to-be ex has local family with significant financial resources. I do not. I have some savings in a 401(k) and some stock grants from a previous job, but that's about it. I also have a chronic illness that can become severe and expensive at any time. My question involves our young child."
"My budget shows that once I move out and have to pay rent, I can't afford half of her tuition. Taking her out of the school is something I really don't want to do for lots of reasons. My lawyer thinks I can get about $70,000 in equity back out of the house I share with my ex. Im inclined to offer my ex keep that money and commit to paying some higher percentage of our kid's tuition."
Read at Slate Magazine
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