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Asset split - reasonableness?(7 Posts)
I am in the early stages of try to agree a financial settlement with my STBXW
Basically the situation is as follows:
House equity 400k (mortgage free)
Pension mine 100k hers 140k
We have a 4 bed house
Two children, one 18 and working 12 month apprenticeship (away from home) before off to Uni in Sep.
Other is 14 (lives with mum) Year 10
I have moved out and renting a room for £600pcm
My net monthly salary is 3x OH
Her mortgage capacity is small, maybe £30k
Mine is about £150k
She wants a 2 bed house - mortgage free that's about £260k ish (She then might decide to upgrade to a 3 bed and get a small mortgage, I mention it but it is not relevant to the split).
That leaves me £140k equity (but I will take most of the cash - for a deposit) and potentially a £100k+ mortgage if I want to also buy a 2 bed in the current location :-(
For what I currently pay in rent equates to about a £90k mortgage
Pensions to remain untouched. This takes into account my additional earnings capacity until retirement.
I presented this to her yesterday and there were a couple of sticky points.
My offer of £260k is dependent on her selling house in the next 12 to 18 months.
If she decides to stay in the house until son is 18 then the this reduces to £240k, this still equates to 60% of equity (as I understand legally at this point she is only entitled to 50%?). This reduction takes account of circa £20k rent payable in the next 3 three years.
She is not happy with this reduction as she says she cannot buy a house mortgage free. She can though, but it would likely be up to 10 miles away from current location. I don't think that this is unreasonable (remember son will be finished school).
Comments please, particularly if you have experienced similar.
Despite her having 40k more in pension, she says that the pension is only worth that if she transfers out. How else can you value a pension - everything I have read suggests you need to use the CETV (cash equivalent transfer value)? The main element of her pension pot is a DB scheme which is worth over 100k. She thinks that if her pension value is not so high then she can get more of the house equity.
Overall 61 39
Ps she currently works PT 25 hrs
Fighting her over this could cost you both 40k each in fees.... Why bother just agree it all.....
Please show her just how much fees will eat into her money.
Tell her too talk to her friends about the costs....
We are both well aware of the costs and are keen to avoid. We are not really that far way from an amicable settlement (I think!). I just asked a couple of specific question about house location and pension pot valuation, are you able to answer either of these questions please?
Pensions will be valued and the difference split... But disagreeing means more costs.... Plus your higher income means you can earn more, so be careful, better too just go quits on it...
You can't dictate where she lives.... Judges I know have just put the house sales on hold for the 6 years till child leaves for uni, then sale, and wide still got 60%.
Also you will still have to hand over child support, which she might use towards a mortgage....
Pensions aren't considered to be "worth" full value at split due to the fact they aren't liquid and can't be converted to cash. How much they are discounted will depend on how close you are to retirement, but I heard a 20-30% discount is fair.
A 60-40 split sounds about right to me given the info you have provided, but you should chat to a solicitor about it. Given where you are I personally would forget about arguing over 20 grand, but your choice.
Is the house value agreed and realistic?
Suggest you present the outline of the proposed division of assets to a Family Solicitor for comment. Always possible they spot something you and partner have overlooked.
Plus they will need to draft the Consent Order to ensure wording is clear before it is presented to the Courts for approval.
60:40 sounds fair taking into account your higher earnings, but lower pension.
Thanks for your comments:
but I heard a 20-30% discount is fair.
Well both of our pots would be discounted then!
We had two house valuation, one for 400k and the other 415k so we have taken the lower
Consent order will be drafted by my wife's solicitor as she is the petitioner.
I was going to use a free 7 day trial with Rocket Lawyer and ask them to cast their eye over my proposal, i do have a couple of specific questions for them.
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