October 1, 2017
“Nesting” is a relatively new concept in divorce. The term refers to a housing situation in which the children live at one house and the parents take turns staying in the house. It is felt that this is beneficial to the children, who don’t have to change locations every few days and can stay on a more consistent schedule, helping them to adapt to the divorce. In addition, it can save money since both spouses can maintain a smaller, one-bedroom off-site residence. Some couples use nesting on a temporary basis, perhaps until the divorce is final or through the school year, while others nest for longer periods of time.
There is much to consider if a couple decides to nest. As opposed to living as a couple in the house the spouses (or ex-spouses) are now two independent people sharing the same quarters, as if they are roommates sharing an apartment. They need to carefully consider the logistics beyond the broad issue of who sleeps at the house on which night. Topics include: who cleans the house, who mows the lawn, where does each party sleep, and what are the boundaries around their personal possessions? Also what happens at the end of the nesting period? The more detailed the plan, the more likely nesting will work as there will be few or no unexpected issues to tackle.
From a financial standpoint setting up a nesting plan involves several steps and can be a little complicated. First, the financial aspects of sharing a residence need to be worked out. These can include who pays the mortgage and taxes, buys groceries (for the shared children) and pays for any maintenance or repair? How are utility bills split?
I recently helped a couple create a nesting plan. First, a complete list of all expenses for both parties, yours, mine and ours, was created. The result was the need for three bank accounts – his, hers and a joint account. Thus, the expenses that are agreed to be paid together will be paid out of the joint account and both parties use their individual bank accounts for all other expenses. There are very clear rules that only the agreed-upon joint expenses are to be paid from the joint account. Each person will keep a record of withdrawals from the joint account and share it with the other party.
Often there needs to be further discussion at this point as to how to fund the various bank accounts. If both parties earn enough to be self-sufficient then the discussion revolves around how much each person contributes to the joint bank account. But if one spouse is not working or earns less than the other spouse, the higher earning spouse may need to contribute more to the joint account as well as contributing to the support of the lower-earning spouse. A clear plan on when, and how much, is deposited to each account will help the plan to work smoothly.
Nesting is a great concept and may be the perfect way for a family to adjust to a divorce, but should be implemented with a strong financial plan behind it.