Why separated parents are "bird nesting"

Bird nesting is becoming a popular way for separated couples to share care of their children. The aim is for children to stay in one property, typically the family home, while the separated parents rotate living there with them. This approach not only helps maintain structure and stability for children, but also circumvents the disruption of having to pack and move between two homes. 

Bird nesting also has the added advantage of easing finances, as instead of having to fund two homes out of the same budget as before, couples can get a secondary, cheaper accommodation option, for example a small rental flat. 

However, despite bird nesting’s obvious attractions, it is complicated with many moving parts, and a range of possible financial impacts that need to be addressed, preferably before the agreement begins, to avoid future misunderstandings. Joanna Newton of Stowe Family Law, explains the advantages and disadvantages.

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"Bird nesting" can result in less disruption for a child. Credit: Dima Berlin

Running a cheaper, more affordable second home can help reduce post-marital housing costs, with less rent/mortgage and cheaper bills, but there are various financial implications to consider, including: 

·       How will the property (and any additional properties) be funded?
·       Whose responsibility will it be to pay for the outgoings of these properties?
·       How long will the property or properties be used?

Couples considering bird nesting need to consider that it will mean they stay financially tied together for longer.  Sharing a home and mortgage, along with potential financial commitments for the second accommodation, will prevent them from a financial “clean break”. 

Maintaining a financial connection through bird nesting may have an impact on how assets are divided during the divorce process.  If the couple wishes to separate their money and have a consent order accepted by the court, it is strongly advised arrangements be agreed before, as the details may impact the settlement. For example, if the house equity at the end of the bird nesting is not to be split equally, should this be reflected in the financial contribution each person makes? 

Problems can also occur if the couple decides to put off dividing their marital assets while bird nesting. For instance, if one parent starts making a lot more money or gets a sizable bonus, or maybe unexpectedly inherits—is this money/new income taken into account when looking at who contributes to what, and what happens, when the time comes to settle finances? Is this included in the settlement when it was actually attained post-separation?  

The unpredictable housing market makes bird nesting appealing to some. Credit: AlbertPego

Bird nesting delays the decision of what to do about the marital home. Considering how volatile the housing marketing is, with falling house prices, rising interest rates, and rumours of a market crash, this could be a good move for separating couples. It may buy them time to ride out any future mortgage rate increases and price crashes.

This is especially true for those couples on historic low fixed-rate mortgages, potentially saving them thousands on the equivalent current deals, now at a 6% average. Keeping the home can also help couples maintain it as an asset and build upon any available equity in the property.

Couples should also think about what will happen when the bird nesting arrangement runs its course or needs to end earlier.  For example, it is important to consider what will happen to the house? How will any equity be distributed? Will it be shared equally or determined by the amount of money contributed over time? 

Having an agreement about bird nesting is a wise move. Credit: fizkes

One way for couples to ensure protection is to draft a bird nesting agreement. This agreement, while not legally binding, can put down clear ground rules and boundaries for both parties to follow, during the arrangement and in the period following.  This agreement can address issues such as:

·       How will financial commitments be shared?
·       How long will the process be in place?
·       What will happen if one person wants to end the agreement early?
·       What will happen to assets and equity when the house is sold?

A lawyer should draw up this agreement, with each party receiving independent legal advice.

Not all relationships or family set-ups will work using the bird nesting model. Success relies heavily on a healthy and amicable relationship between two parents, with an equal balance of power and respect.  If there were any issues of domestic abuse during the relationship and/or post separation, bird nesting is not suitable at all.  

With the deepening cost of living crisis and the likelihood of a rise in mortgage rates, many couples are driven to seek new and creative ways of managing their finances after separation. Bird nesting may offer one creative solution, but only if its financial implications are carefully understood, an outcome that is always best achieved with legal advice.