A recent Wall Street Journal article discusses a growing problem. For many couples going through divorce, they bought their house and have a low-interest rate mortgage. Since they are separating, they now have to work out child custody. So, how are divorcing couples managing in this current, high-interest-rate, high-rent market, and minimizing the disruption on their children?
The Good Old Days
You’re married, have children, and have a home with a mortgage. Lucky for you, you locked in your mortgage rate in 2021, when the average 30-year fixed mortgage rate dipped to an all-time low of 2.68 percent.
These days, the average interest rate on a 30-year fixed mortgage stands at 6.35 percent. As recently as January, the average 30-year fixed mortgage rate exceeded 7 percent.
Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional cost each year, depending on the price of the house. For any couple locked in at a historically low interest rate, how do you avoid selling the marital home in a down market when interest rates and the cost of ownership are substantially higher?
The Wall Street Journal recently explored a growing trend for parenting plans among divorcing couples: “nesting”. Nesting is a parenting plan in which children remain in the marital home while the parents timeshare in the marital home. Instead of forcing children to shuttle between two homes, the parents do the shuttling.
Florida Parenting Plans
I’ve written on Florida’s attempts to legislate the parenting plan concept before, including complex and international custody and other issues.
In Florida, a Parenting Plan is required in all cases involving time-sharing with minor children, even when timesharing is not in dispute.
A “Parenting plan” is a document created to govern the relationship between the parents relating to decisions that must be made regarding the minor child and must contain a time-sharing schedule for the parents and the child.
The issues concerning the minor child include the child’s home, education, health care, and physical, social, and emotional well-being. In creating the plan, all circumstances between the parents, including their historic relationship, domestic violence, and other factors are taken into consideration.
The Parenting Plan must be developed and agreed to by the parents and approved by the court. If the parties cannot agree to a Parenting Plan or if the parents agreed to a plan that is not approved by the court, a Parenting Plan will be established by the court with or without the use of parenting plan recommendations.
Bird Nesting
Every family situation in a divorce is different. Nesting may be an option to consider. Some parents rent a small studio or apartment near the marital home, keeping essentials like toiletries, chargers, and even spare glasses to reduce disruptions. The child usually stays only in the family home, not the secondary space.
Many families often reassess whether nesting still works, as it requires significant compromise and coordination. Divorce is already a compromise, and nesting adds more to that complexity. Lawyers note that a “fair” settlement often leaves both parties somewhat dissatisfied.
Selling the marital home may free up the equity in the home, but selling also forces both spouses into today’s high housing costs and high mortgage interest rates. A buyout requires refinancing, often at much higher interest rates. Renting an additional apartment adds to ongoing expenses, and is not cheap in Miami.
Some divorcing families prefer to keep their shared traditions, such as their weekly meals in the main house. Children sometimes frame the arrangement in positive terms, such as “camping out” with one parent. Still, blurred boundaries can create challenges for parents.
Nesting offers stability for children but comes at high emotional and financial costs for parents. It requires constant negotiation, limits your privacy from your ex-spouse, and still brings extra housing expense. For some divorcing couples, nesting is a transitional and temporary arrangement. For other couples, nesting lasts years – provided both parents can tolerate the compromises.
The Wall Street Journal article is here (paywall).