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Cynthia and Howard's Story

Cynthia, a nurse administrator at a nonprofit agency, and Howard, a civil engineer, lived in a house they bought with savings and some help from both sets of parents. Both of them had good jobs with good benefits. They had two daughters, Sarah and Maya, ages seven and nine. After each girl was born, Cynthia took six months off and then worked half time, increasing her hours to 30 per week when Maya started kindergarten. Howard worked a fairly predictable 9-to-5 day when he was in town, but his job required frequent travel. His absences were one factor in the growing emotional distance between them, and after almost 11 years of marriage, they separated.

After the initial shock of the decision wore off, Cynthia and Howard were able to agree that they wanted to divorce as amicably as possible for the sake of the children. They also agreed that they'd try to do the divorce themselves instead of hiring lawyers-they figured they would save money and Cynthia was good at doing research and paperwork. She went to the bookstore and purchased a couple of divorce guides, and did some Internet research to get started. Their marriage counselor agreed to act as a mediator and help them to make decisions about their kids and their property.

What Your MSA Should Cover

• Child support

• Spousal support

• Health, life, and disability insurance

• The house and other real estate

• Cars and other vehicles

• Household items (furniture and furnishings)

• Personal items, including clothing, jewelry, tools, and athletic equipment

• Stocks, bonds, and mutual funds

• Bank accounts

• Retirement plans and pensions

• Family business or professional practice, including accounts payable and receivable

• Pets

• Art work

• Frequent flyer miles and other miscellaneous assets

• Stock options

• Parenting (separate parenting agreement should accompany MSA)

• Name changes (you, your spouse, or the children)

• Credit cards and other debts

• Tax payments and distribution of refund

• Fees for mediation, lawyers, and counselors

• Social Security benefits

• Modifying the agreement later

• How disputes will be resolved

• Which state's law will govern in the event of a dispute.

Housing

One of the first decisions you'll need to make is where each of you will live and what will happen with the house. Chapter 10 deals with this question in detail. Whatever you decide, make sure that your MSA is specific about the timing of the various changes. For example, if you're both still living in the house, the agreement should include a date that one of you is going to move out. If you're transferring it, set a date that the paperwork will be signed. If the person staying is getting a loan to buy the other person out, put a time limit on getting the financing in place. The dates need to be realistic-don't leave only two weeks for getting a new mortgage if you haven't even begun looking.

Parents often make agreements about continuing to live in a certain proximity to their children or not to move out of the area or out of state for a specified period of time. If you both have stable work situations and can afford to live in the same area, this is a great way to avoid future conflicts over one parent's desire to move away.

By the time Cynthia and Howard separated, the balance on their 15year mortgage was $145,000, with a monthly payment of $1,100. They estimated the house was worth about $295,000, and that their equity was approximately $150,000. The house was in a nice neighborhood, an easy commute for Cynthia and a slightly longer one for Howard.

Howard and Cynthia were both very attached to their house. They had worked hard on landscaping the yard, building a deck, and gradually perfecting the interior. Cynthia wanted to stay there with the kids and have Howard move out. He was reluctant, but finally agreed. He found an apartment in a fourplex about half a mile away. It wasn't cheap, but they agreed it was important for him to stay close so that the girls could easily go back and forth.

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