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Step family pensions and wills

(7 Posts)
Kangaroo123 Mon 15-Feb-16 17:44:07

I moved in with my DP 7 years ago, to his house, with his kids. And now I'm quite worried about my future financially!

DP had no equity in his house when I moved in, as he'd remortgaged to pay for a house for his Ex. I paid rental to him as I was working. I have one child, he has four children and we have one together- total six, phew!

Our child together has special needs and I gave up work. He has a financial agreement with his Ex sorting out all assets, but is not divorced. He tried but the solicitor said he would have to pay a lump sum to his Ex for her to waive her rights to his pensions, and he doesn't have the money. His wages have gone down in the last few years and now we barely make the huge mortgage.

I have a house which I let out, which also has a big mortgage, it's not worth much and is not in a place I'd ever live again. I have no pensions myself. As a single parent, I worked but no chance to build up very much.

My question is - how do we both try and carve out a future financially for us and everyone? At the moment, if my DP died, he's put his children only in his will, so I'd be out on my ear. I'm not on the mortgage on DPs house and it feels like it has nothing to do with me.

Yet I feel I am contributing, now not financially but one of us would have to stay at home with the small child. I asked my DP about wills and the house, and wouldn't it be fairer to put me on the mortgage, have half and half share, and for me to leave to my two children, and him to leave to his five. He said that wasn't acceptable and he would leave fifth shares to all his children only.

Pensions - I'm also worried - basically his Ex will have half his pensions if he doesn't divorce and I'll have none. This doesn't seem like a very good future for me. Any advice?! I'll post on legal too but this board seems very good on step family situations.

Viviennemary Mon 15-Feb-16 19:21:53

You'll probably get more replies by posting in money matters or even chat. but my advice would be to go to the Citizens Advice Bureau and see what they suggest. Even if your partner did get divorced his ex would be entitled to some of his pension but if she has one he would have a claim on hers.

Also his wife will have a claim on his house as far as I know so I don't think it's as simple as just putting you on the mortgage and half the house in your name. It does seem wrong that you haven't got financial stability for the future. I think you should do something about sorting this out sooner rather than later. Hope things work out.

Collaborate Tue 16-Feb-16 08:21:21

You both need to get advice from a wills specialist (plug for Mumblechum here) who can advise about the best way to keep everyone happy, including you. You would have a claim against his estate under the Inheritance Act (very messy) if he left you nothing.

Mumblechum1 Tue 16-Feb-16 12:16:22

Thanks for the plug Collaborate wine

OP, it is very clear already to you that you need to have the protection of your DP's will giving you some way of surviving and preferably staying in the house.

If he died now, you'd have to make an claim under the Inheritance (Provision for Family and Dependents) Act 1975. You'd essentially be suing your own child and step children for a lump sum and/or ongoing maintenance. The cost of such an application would run into the tens of thousands and would only reduce the money available.

I realise that your DP is being stubborn about this issue. If he were my client I'd be advising that he makes a will giving the house to the children in whatever shares seem appropriate (usually this would mean more to a younger child for the time being then adjusting it when all the children are growing up to make it more equal).

However he wouldn't be giving the house to the children directly. He'd be placing it on a life interest trust. This means that although the trustees of his will are named on the Land Registry as owning the property on trust for the children, you have the right to continue to live there until you die or marry someone else, at which point the house is sold.

During the intervening time (the trust period), you would be responsible for the outgoings. As there's a mortgage, it's crucial that your DP has insurance in place, as the lender isn't going to let you stay there if your name isn't on the deeds. An insurance policy in these circs would probably take the form of a decreasing term insurance policy so it just automatically cleared the mortgage.

If you wanted to move house within the UK you could do so, as long as the trustees were happy, as they have responsibility to protect the children's inheritance.

I know your husband is being a bit pig headed but if you can persuade him to look at a life interest trust (there's an article about these trusts on my website) it would probably solve your problem.

Kangaroo123 Tue 16-Feb-16 12:30:58

mumbles and others - thank you so much for your replies, much appreciated! I'll post on money board too just in case.

I want all of our kids to have fair shares of inheritance - but I feel like I am contributing to this house that I live in - just because he's the earner and I'm the stay at home mum - I'm not sure I'm comfortable with not inheriting anything from this house, for me and for my kids as well as his.

I'm seriously considering moving out - I could get a part-time job and in two years my own mortgage again and my own pension fund without my partner.

greenfolder Mon 22-Feb-16 06:47:57

Without stating the obvious, at this point I would be looking to sort out a life assurance policy on dp put into trust for you Asap. It is pretty clear that there really isn't enough cash at the moment to look after everyone should anything happen to dp. My friend did this (slightly different) for his older kids from his first marriage. He re married and has 3kids with new wife. Both have worked hard to buy a house which is in joint names and will obviously go to his wife. In the interim he took out a life assurance policy which was for the benefit of his former wife and dc should anything happen to him. Hopefully he will live to ripe old age though.

Kangaroo123 Tue 23-Feb-16 13:31:54

Thanks greenfolder - that is the one thing that my DP is in agreement on. That he takes out a life assurance policy. The thing that is bugging me is that until he divorces all sorts of things make me very vulnerable. And unless I had a roof over my head, if I'm unable to work and gain a mortgage any money would soon run out in rent.

Basically I wish he'd discuss this and not just run away from it all and bury his head in the sand! Also, I think he wants this house to go to all of his children and doesn't see it as anything to do with me at all.

I've put a time limit on it and said if he didn't divorce soon and we sort out that I am 50/50 share in this house that I'd move out. I am just finding it too stressful all the uncertainty.

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