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Advice, please, re. splitting proceeds from house sale post-separation(17 Posts)
I am posting this in Legal as I’d really appreciate any expert input - but general thoughts would be very welcome too!
DH has read this post, fully endorses it, and is also keen to hear your responses.
Here is our situation:
DH and I separated in May. We have been together for 20 years (seven years co-habiting followed by 13 years of marriage). We have DS (13) and DD (11). DS has high-functioning AS. DS is at a mainstream boarding school, and DD is at a private day school.
DH is 75 and I am 44. He took (early) retirement soon after we met. I had a professional job for three years in total (took a year’s maternity leave when DS was born, then resigned just before DD was born).
Our income since then has, roughly speaking, consisted of four elements:
DH’s pension (occupational and, more recently, state as well).
Income from three rental properties which we jointly own.
Sporadic income from freelance writing and translating work (mostly me, but also DH).
My earnings from a part time job at DD’s school. The earnings are tiny (around £3,500 per year) - but the job comes with a valuable 60% fee discount.
All our income has beeen paid either into our joint current account or our joint mortgage account. Neither of us has ever had a separate bank account or separate money.
Although DH retired from his professional career 20 years ago, he works around 30 hours per week, 52 weeks per year managing and maintaining our rental properties. I have taken on the vast majority of the childcare (which is what we both wanted), and have had the particular challenge of managing the problems associated with DS’s autism.
DH and I have been living together in our family home since we separated, pending a sale of both this house and one of our rental properties. However, we have now accepted offers on both houses, so need to make some decisions very quickly.
Despite our separation, we are on very good terms with one another, and are keen for it to remain that way. We would like to sort out as much as we possibly can without lawyers, and have managed to come up with something that is starting to look like a fair agreement. However, we are stuck on one particular issue - namely how to divide the proceeds from our house sales.
We have agreed the following thus far:
1. The DC should be enabled to continue at their current schools, where they are both happy and settled.
2. DH would retain assets (shares and artworks) which pre-date our marriage. They currently have an estimated value of about £140K in total.
3. DH would pay DS’s fees (around £15K p/a). He would pay as much as possible from income and could draw on his sellable assets to pay for some of this if need be.
4. I would pay DD’s fees (around £7,500 p/a) from income.
5. Neither of us would be able to obtain a mortgage (DH is too old, and I have insufficient income).
6. Although I would in principle still be young enough to work, we both accept that it would be impossible for me to return to work in my former profession after such a long gap.
7. We also both accept that DS in particular needs me to be at home with him in the holidays, which rules out a full-time job. DH could not cope with DS, even if he weren’t largely occupied during the day.
8. We are also both reluctant to lose our school fee discount, which we would do if I left my part-time job there.
Assuming both sales go through, we will have a lump sum of £700K to spend on housing.
The question is this: how could we split this £700K in a way that seems fair and reasonable and particularly meets the needs of the children, given the above agreement?
We want the DC to feel at home in both our houses. However, they will primarily be living with me. For reasons connected with DS’s autism, the DC are very unlikely to spend time at DH’s house together, but we can’t entirely exclude that possibility. As they are a boy and a girl, DH will need a house with three bedrooms, even if the third one is relatively small.
I would need a house that would accommodate the two of us comfortably during term time and the three of us comfortably during school holidays/exeats/half terms. I would obviously also have to accommodate all the children’s Stuff (musical instruments, games, clothes, shoes - all the general junk that accumulates when you have children).
To give you an idea of what is potentially available, we are moving from a spacious 6-bedroomed semi in a prime location with 1/3 acre garden, parking, storage etc. We both want to stay in this area as we and DD have friends here, and she can walk to school easily. A 2/3 bedroomed well maintained Victorian terrace with a back yard in our area would cost around £300K. Family-sized houses of a similar vintage tend to be heading towards the millions (!), but larger terraces and 1930s semis are nearer to 400K.
Thanks for reading this far. We would very much welcome any help with this one, even if it just gives us a new perspective...
Too complex for you to be seeking advice on an (anonymous) public forum.
Go and see a mediator. Also you each need to see a solicitor who specialises in Collaborative family law, so that they will be fully behind the wish that both of you have to work together on this one to find a solution that works for you both. The issue between you seems to be quite narrow, so the cost of sorting it out shouldn't be too great.
Thanks for your reply. We have both seen collaborative family solicitors, and will be using them even if just to finalise our own agreement. I think we are just trying to get a sense of how the money from the sale of the family home would tend to be split given that the children will be living mostly with me. I understand that it would normally be 50:50, if such a split would enable everyone's needs (and in particular those of the children) to be met, but that it might be adjusted if such a split meant that the children couldn't be reasonably housed otherwise.
Not a legal expert at all, but from a layperson point of view you also need to consider what is happening with the income from the remaining rentals and is DH taking a "wage" from that? What about the ownership of those properties? And what other income will you have to live from given that your earnings are half the school fees before you start to think about council tax etc. Another consideration would be if DH in particular is likely to remarry and whether he has other children. If no to both those then it may be appropriate for him to take a lesser share to buy with on the basis that the rest of his 50% is put in trust for your children ?
Ok thanks might there be an option to do something with the remaining rental properties that would allow for an unequal split of the cash proceeds from the current sales?
Thanks for the replies. I had rather suspected that would the general advice would be to consult someone in real life, but had just thought it might be interesting to see if there was any straightforward answer that we might have missed. Thanks, though, for advising!
Minor point I know. But I'm wondering how your husband can possibly spend
" 30 hours per week, 52 weeks per year managing and maintaining our [three] rental properties ".
Assuming that these are single family dwellings ( flats or houses ) and not blocks of flats with multiple tenancies . I've never heard of a landlord spending 10 hours per week every week all year on each property . How on earth would anyone make money doing this ?
Unless you mean that these properties are wrecks and he's spending 30 hrs per week doing them up ?
So if I were you I'd be wondering what he's actually been doing for all this time ...
I agree this seems complicated and you need to think about your pension provision too given that you have basically given up your earning power and (pension) in order to raise your children.
In terms of the housing money it seems fairly straightforward to me - you need a house for two people all the time, he needs a house for one all the time. 300,00 will buy what he needs, 400,000 will but what you need. Split it that way.
K1mberly, that is a good question. The answer is that they are hol lets, so most tenancies are 2 nights. H does all the admin, cleaning, meeting and greeting etc.
NL, your suggestion is exactly the one I had come up with!!
Given his age, I think I would ask for 425,000 and one holiday let.
Agree that he stays responsible for your sons school fees.
CHild maintenance of £600pcm.
The child maintenance would depend upon his monthly income as regards to what I would ask for.
You did sacrifice your career so that should be recognised.
I don't think with all due respect that a 75yr old needs a large house. Something smaller than what you require for sure.
I would say you need a slightly larger house. If you took him to court you would be entitled to 50% of his premarital assets too, so a split that recognises that would make sense. E.g 400:300 or 425:375. What's happening about the ownership of the other two properties? Will they stay 50:50?
I suspect that the other properties are within a company so as such not marital assets but business assets, so really not sufficient info here.
There is no recognition to date for your sacrifice in terms of income by taking a part time role and your decisions meaning you can't go back to a previous career currently (although personally I would be looking to update my skills and prep for going back once DD off in the world, or at least something related - depends what it was.
I don't think 30 hrs is unreasonable for managing several holiday lets including web design, accounts, maintenance and cleaning etc, its pretty low key but at the end of the day he is 75!
You are retaining most family responsibilities, he is only ever having one child at a time and retaining the key income, I would say he needs a decent guest room and you need the home so the split should be weighed in your favour and if you want once they leave home a review of the decision e.g. many women retain the family home until youngest 18 - although there are other issues here such as ExH age.
I would sit down and do some personal financial planning and look at what you actually need to survive. e.g. fees of 7.5 and salary of 3.5 plus running a house don't add up to me!! Once you have done this you should between you be able to work out what is needed in the split rather than what is deemed fair - you can't just consider ££ you need to look at it more holistically in terms of providing security for the future for both the kids and yourself
Agree it needs to be looked at holistically and also needs to consider the security for her DH. At 75, realistically how many years is going to be able to look after the properties in the way he does at the moment, so what is the back up plan? Would you need to employ someone or would you do it? How would that work in terms of him being able to continue to pay for DSs school fees or can he fund that from his pension and the remaining income? Will he be paying maintenance? More questions than answers here really.
Thank you, all, for the replies. They are very helpful indeed - we want sensible/common sense advice as well as legal, so this is very much appreciated.
I don't want to add too much without DH seeing it first, but the hol lets are marital assets rather than a company, and are owned 50:50. We would plan to keep it thst way. Once DH decides he can't look after them any more, we would have to revisit their fate, though at the moment I imagine we would ask an agent to take over the maintenance.
As things stand, DH won't be paying me maintenance as such, as our main earnings are from the hol lets, and are shared equally. He is proposing to share his pension income equally with me, but to retain pre-marital assets which he could sell. If need be, he would draw on this to pay DS's school fees.
Hope this extra info helps!
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