WAW? Would Love Opinions. Part 13

[KGuy]

I think she we will work with me but I am going to need to get creative. I have enough money in the 401 to cover but she wants cash on hand to pay off debt and to have some money in the bank.

My mortgage guy is checking with the title company to see if her name is on the loan if it is I think the only way to get her off of the loan is to refi. If I have to go that route maybe I can get around refi-ing all of her portion of the equity.

If she won't budge and I have to refi half the amount it is really going to be a struggle.

I think she can sign a release of the loan to you without you refinancing (a quit claim deed or something like that), but she would still be liable for the loan if she is on it. If you fell behind, she could foreclose on you. Thats what i did, but the W wasn't concerned about her liabilities at the time. Assuming you bought the house during the marriage, i don't see why she wouldn't be on the loan.

I was fine going to an apartment until yesterday. It was a beautiful day outside and after we got home from church the girls went outside and played with the neighbors all afternoon. They rode bikes to the park and it just reminded me of how it would really stink if we had to move. They still call our house their home and they refer to the W's apartment as such.

Sounds like they feel the way i had thought my kids felt about my house. With that in mind, i'd be leaning towards keeping it if you can. As Vanilla points out, you can always make a different decision later if you decide its too much, meanwhile the property values might increase where you'd do better at that time.

One thing, though, is to be careful about which assets you give her in the D. If you give her all cash and equities, and are credited the same amount in your retirement account, when you cash out your retirement, you will be taxed at around 30%, whereas your W will only be taxed at the long term cap gains rate of around 10%, so you will have given her almost 20% more after tax money than you received.

If she wants only the cash, you'll have to pay not only the taxes (the 30% mentioned or whatever your bracket is) but also a penalty (I think its 10%) on the 401k. the penalties and taxes may shoot yourself in the foot here. I agree with Jim, make sure you don't lose too much here. On the other hand, you could just negotiate with her. At first offer like amounts and let her transfer the assets and deal with all that herself.