My first LIVE caller during a Colorado radio interview highlighted another hidden danger from divorce real estate:
To help their adult son get back on his feet financially, the parents gifted an "early inheritance" to buy a fixer-upper. But with the son's credit issues, only the parents were named on the house title and mortgage.
Fast forward a few years and two new developments:
- happily the fixer-upper is fixed (by the son) and the house has appreciated in value
- sadly the parents are now divorcing
The divorce rub: one parent confirms the son's house is an inheritance but the other wants the "son's" house included as a marital asset.
With no paper trail confirming the inheritance, the parents are both SPENDING marital assets to litigate whether they gifted the funds needed to purchase the son's house.
Bottom line: no one is winning financially or emotionally in this battle.
Lesson learned: Get it in writing. This problem could easily have been prevented with professional help regarding the "gift" or early inheritance at the time the house was purchased. Now per divorce, after significant costs and legal fees, it will be resolved by the judge - with no one the true winner, no matter how it turns out.
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