MW My friend is getting divorced. Her husband offered to sign over their house. What's he hiding?

By Quentin Fottrell

'After my friend said that perhaps she'll just settle for the house, her husband agreed and moved to file for divorce quickly'

Dear Quentin,

I'm writing on behalf of a friend and family member who is going through a divorce. I have asked her to consult an attorney to make sure she feels good about her decision regarding the division of assets., At the same time, I don't want the divorce to be dragged out and get acrimonious. She and her husband are in a cordial place now, but I fear the asset division will end it. They have been married for 20 years in Maryland and have been separated for four years.

Her husband moved to Florida during that time. Right now, my relative is considering just settling for the house - the mortgage is paid off and worth about $600,000 - the husband paid off the remaining $65,000 on his own in the last few years of the mortgage. My relative is frugal, so even with her $86,000 salary, she is comfortable. Her husband appears to not have a lot of cash flow - most is tied up in a $788,000 house in Florida that is worth less than what he owes.

'He has been working for a government defense contractor for 20 years with a $206,000 salary and likely a decent 401(k) and pension.'

However, he has been working for a government defense contractor for 20 years with a $206,000 salary and likely a decent 401(k) and pension. My friend may be better off financially if they split half. They want to settle this without a lawyer by just going to court where he signs the house over to her. They try to avoid using lawyers since they went down that route before - and paused the process, but it was still costly.

I am curious to get your opinion as to the best course of action. I told her to consult a lawyer and make sure that she knows what she left on the table and is OK with receiving the house. After my friend said that perhaps she'll just settle for the house, her husband agreed and moved to file for divorce quickly, which makes me think he got the better deal. Thenagain, money isn't everything. What are your thoughts?

An observer and a friend

Related: It's my dream to travel to Africa. Can I pay for my husband's trip without commingling our finances?

Dear Friend,

Your friend may be aiming for the impossible: a divorce free of acrimony or resentment.

Maryland and Florida are not community-property states, meaning the assets may not be distributed 50/50; your friend should consult her own lawyer, but given that she earns less than her husband, she is likely due a higher settlement and/or half of their marital property. Let the lawyer be the bad cop to your friend's good cop. Advise your friend to be civil, polite, kind and stick to the goal of splitting all assets 50/50; that doesn't just include the house.

Assets are divided fairly - if not always equally - in an equitable-distribution state; in a community-property state, everything earned during the marriage is split 50/50 (with inheritance being the one exception). There is a presumption that marital property should be split 50/50, but a judge could decide upon a different division. A lawyer would operate on the assumption that this is community property, as it was earned during the marriage, and push for a 50/50 split.

While awaiting the negotiations, she should take an inventory of all life-insurance policies and retirement accounts (including her husband's 401(k)). If there's $1 million in that 401(k), she is potentially throwing away $500,000 pretax. I also wonder what other assets (bank accounts, brokerage accounts etc.) are lying around. Is that Florida house really worth less than what he owes? The housing crash was more than 15 years ago, after all.

Don't miss: After 25 years, I finally asked for separate checks - and my friends iced me out. Did I do something terrible?

A qualified domestic relations order $(QDRO)$ would allow your friend to receive a portion of her former spouse's retirement plan under the oversight of a judge based on state law. "When dividing the assets, the receiving spouse may choose to take the money as a distribution or roll it over into their own retirement plan account, such as an IRA," says Merrill Edge, an investment advisory service owned by Bank of America.

"The typical additional tax for early withdrawal does not apply to distributions made pursuant to a QDRO, but the receiving spouse would still owe federal and, if applicable, state income taxes on the distribution," it says. The receiving spouse would not owe income taxes on a Roth or traditional IRA if they are rolled over into their account rather than taking a distribution, because the transfer is part of a divorce settlement, Merrill Edge adds.

In the history of divorces, one spouse never suggests a simple, easy split with no lawyer involvement if it doesn't benefit them. Case in point: This reader's ex-wife told him at a family function that she should have been compensated for working part-time when they divorced 20 years prior. She may be right, but it's a long time to hold onto a regret. I don't want your friend to only realize afterwards that she left hundreds of thousands of dollars on the table.

Marriage is a partnership - and its dissolution often involves financial sacrifice for the wealthier spouse.

Related: 'I'm living paycheck to paycheck and I feel drained': My fiancé said he would pay half of the mortgage. Guess what happened next?

Readers write to me with all sorts of dilemmas.

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.

By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

More from Quentin Fottrell:

I had a date with a great guy. I didn't drink, but his wine added $36 to our bill. We split the check evenly. Should I have spoken up?

'I'm living paycheck to paycheck and I feel drained': My fiancé said he would pay half of the mortgage. Guess what happened next?

'We live in purgatory': My wife has a multimillion-dollar trust fund, but my mother-in-law controls it. We earn $400,000 and spend beyond our means.

The Moneyist regrets he cannot reply to questions individually.

-Quentin Fottrell

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June 07, 2025 10:14 ET (14:14 GMT)

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