My husband and I are in the middle of a difficult divorce. We cannot afford to keep the house and the court ordered us to sell it. There is a lot of equity and we cannot agree on how to divide it. My husband has been living with his girlfriend for the last couple of months. I need a place to go with our two kids and I owe my lawyer money. Because I haven’t paid in several months, my lawyer hasn’t been very responsive. I don’t blame her but I am having trouble figuring out my options.
My husband suggested we each take $15,000 now and put the remaining sale proceeds in escrow. I don’t really understand how that works. Also $15,000 isn’t enough — it will cover my lawyer’s bill but it will not leave us enough to secure our rental home. What are my options?
It is not unusual for a house to be sold mid-divorce when funds are tight. Typically if the parties cannot agree with an amount that will be advanced to each side, the court will entertain a motion for an advance. It sounds like you need more than the $15,000 he is willing to advance, which means you may have go to court. Ask your lawyer to file the motion so you have enough to pay her and move — when she hears you want to pay her, she is likely to respond quickly.
The advance does not have to be equal. He has a place to go — you and the kids do not. You should ask for an unequal advance because the kids need a roof over their heads and his girlfriend’s roof is not appropriate for you and the kids.
As for the escrow piece, it is not uncommon for one or both of the lawyers to act as escrow agent. A new interest-bearing bank account would be opened to hold the proceeds. The lawyer(s) would have signing authority on the account — not you or your husband.
People often feel uncomfortable with having their spouse’s lawyer act as escrow agent. You should know, an escrow agent has a fiduciary duty to the owners of the funds in the escrow account. It is like being a trustee of a trust. The lawyer could only withdraw funds or make disbursements when there is a written agreement signed by both parties or when there is a court order. If the lawyer acted in breach of this fiduciary duty and disbursed funds in some unauthorized manner, he or she would be subject to disciplinary action by the Board of Bar Overseers. Lawyers take this fiduciary duty very seriously.