What is reasonable with this money from PILs in our marriage breakup?

[SadieAmberson1960]

I apologise in advance: this is long, but I don't want to drip feed.

Before we bought our house, PILs gave husband £30k. I wanted him to put it in a pension for himself, but he wanted to use it towards the house. So we used it as our house deposit. We bought the house for £150k, with the £30k deposit and a £120k mortgage. We then built up a lot of loan/credit card debt and so we lent £30k against the mortgage to consolidate debts, giving us a £150k mortgage - the original house purchase/value. We subsequently couldn't afford the mortgage repayments, so switched to interest-only on the mortgage.

Ten years later, we had built up more debts and we still owed £150k on the mortgage. But I had taken sole control of managing our money and cleared all our debts by careful credit card snowballing. I switched our mortgage from the terrible interest rate we were paying and got us a much better rate on repayment so we could start paying back the £150k mortgage. I also did a ton of research into investing and sorted us both out with pensions, S&S ISAs and cash ISAs. I did all the legwork and research: husband did nothing apart from sign things I put in front of him.

Another seven years on, we have no debts, have a nice stash of savings and pensions and are paying down the mortgage: thanks to all my efforts.

A few years ago PILs gave husband another £60k. Again I suggested it go into his pension, but he wanted to use it on the house. We spent £20k on the house: updating decor, new windows and doors, and a new drive, fencing, plants, and so on. We used the rest to overpay the mortgage.

We are now splitting up. The house is worth £350k. We have £270k in equity in it. Husband wants to stay in the house and I want to move out. The pensions and savings are simple enough to deal with: we have equal amounts in each of our names anyway. That leaves us with the £270k house equity to split and the question of the money his parents gave him.

There is nothing tangible to show of the original £30k. We did use it as a house deposit 15 years ago, but we took the equivalent amount back out of the mortgage to consolidate debts. Those debts were from things like cars that we no longer own, holidays, a computer we no longer have.

I've proposed we take off at least £40k from the £270k equity and then split the remaining £230k. Thus giving husband back the £40k from his parents that we overpaid on the mortgage. As he's staying in the house, he gets to keep the benefit of the other £20k from his parents that we spent on it.

He has proposed we take off £90k from the £270k: the original £30k from his parents plus the later £60k - leaving us with a remaining £180k to split equally.

I have no idea what would be reasonable here. While I know I'm officially entitled to a straight 50:50 split of everything, I'm certainly not after his parents money: after all, my original suggestion for both money gifts were for them to go into a pension for him only (and if that had happened, I wouldn't take half his pension now we're splitting up). But that original £30k doesn't exist anymore as we have nothing tangible to show for it, and £20k of the second lot of money was spent on the house that he's keeping. I do appreciate, however, that the equity that we do have is likely greater because of the £20k we spent on it and also because we could 'afford' a bigger house with having a £30k deposit in the first place. On the other hand, the reason I mentioned above all the work I did to get us out of debt and research into investing is because we wouldn’t have this level of money to split if it wasn’t for the efforts I put into our finances.

What do you think would be reasonable?

Legally, I'm sure you are entitled to 50% of the total equity.

In all honesty, what I myself would do would depend on the circumstances of the break up. You did benefit from the initial £30k gift as it is what enabled you to buy your home in the first place. The fact you then ran up joint debts which you borrowed a further £30k to repay is not relevant to that. Without that initial £30k there may never have been the £270k equity in the first place.

To put it bluntly, if the separation is mutually agreed, amicable etc. then I would give him back his £90k before splitting the remainder. Don't forget that the £20k spent on "his" house will have improved the value to some degree, from which you will benefit.

If he's run off with the local barmaid I'd fight him for every penny I was legally entitled to.

I can be petty like that.

No we didn't sign anything with PILs or have any agreement on what would happen if we split up.

Thanks so much for all your replies - I really appreciate it. My head is spinning with trying to do the right thing but also not doing myself out of what I'm entitled to.

The money come from his parents so in my eyes the money either goes back to them or it's his.

If the money had come from your parents the same would also apply.

It's a moral thing I think

But it was a gift, not a loan.

The OP could start saying now that he'd spent more than she had at times - where would that end?

I really don't know. I mean the 30k does exist really though? You spent it somewhere when getting into debt etc didn't you?

Anyway it's all a bit complicated. 50:50 could be easier, I don't think it's morally questionable either tbh. Surely if his parents gave him the money then they're aware (and your DH) that's it's not actually 'his' money, it would be 'your' money if you were married, regardless of how they presented it.

I think you're being generous offering 40K tbh, maybe offer 45K (half of the 90k) if you feel morally obligated to?

I would think it would be fair to split it half and half because as you say, he's apparently shit with money and you did the heavy lifting on leveraging the contributions. Plus you were a couple for all that time.

Yes I do get on well with my in-laws.

It is me instigating this split. Neither of us have run off with the local barmaid but we have simply fallen out of love/drifted apart. At the moment we are fairly amicable, but he resents me for ending the relationship and I can sense a storm brewing.

We have been married for 11 years, together for 20 years.

Yes BoffinMum, he's shit with money. He likes to have nice things and I rein that in (since I took over our finances).

I think the earlier money has gone - that £30 gift was 15 years ago. If you'd known you had to pay it back, surely you would have dealt with it differently.

I think you've underestimated how much you did to 'rescue' the financial situation you both were in.
If you didn't do what you did there would be no savings, pensions and no house probably so tell him that
50/50 is the only way as he will still be i the house
Or as someone else has said if he wants the house then he needs to buy you out

He is going to be living with the added value of that £20,000, isn't he? Why should he have the cash back, too?

The fact is that in court I doubt he'd get a penny more than you. If you give him £40,000 more, you'll be doing a hell of a lot more than a lot of people would do.

Are his parents going to buy you out?

I think a lot more goes into the value of a house than just money. Who did the gardening? The decorating? The buying and organising of stuff? The cleaning? If those jobs were all shared 50/50, then maybe there's a moral case here. But if you did more than 50% of them, then that needs to be considered too.

I'd take the £20k that was spent on the house out of the equation, personally. It doesn't exist any more, regardless of it being spent on the house, it exists just as much as it would if you had spent it on M&Ms and eaten the lot together.

If I'm very very honest, I do admit to feeling some resentment about all the work I put in to getting us out of debt, remortgaging to a better interest rate, our pensions, and ISAs. You're right, he'd have none of that if it wasn't for me. I tried to involve him many times, but he was never interested and just agreed with whatever I suggested.

He has had money handed to him on a plate - by me with all my work on our finances, and by his parents - with zero effort from him.

This resentment night be clouding my judgement.

I'd just split the equity in half. It's not your problem that his parents gave him all that money & no doubt he'll get more in the future.

It takes money to start a new life so take the cash while you can.

I agree that you are probably legally entitled to 50%, but on the available facts I think you are doing the moral thing in offering to take less. (There could be facts not in evidence that would make me change my mind about what is fair. For example if that vast majority of money spent was earned or spent by one or the other of you. For the time being I'm assuming that one didn't contribute ten times as much as the other to either earning or spending.)

I don't think most of the detail in the OP is of any relevance, all that matters is that 90K gifts from his family went into the pot, so the pot is 90K bigger than it would have been without their gifts. So I do think it would be reasonable to reserve the first 90K equity for him and split the rest.

If you are going to be buying another property then I'd suggest your moving costs (mainly stamp duty) should be 50% funded by your ex, so you are not disadvantaged by being the one to leave.

No, his parents won't buy me out - my husband will need to remortgage in order to buy my out.

I'd say we put equal effort into the relationship. As well as the finances, I did cooking, shopping, half the cleaning. He did half the cleaning and house maintenance and gardening. We had people in to do the windows and drive and so on.

I don't blame you for feeling resentful about it. I think a lot of the time the contribution many women make to the household is undervalued. I always bang on about this, so apologies to anyone who has heard my rant before, but waged work utterly depends on the work in the home to reproduce the conditions for it. This isn't just in terms of who irons the shirts for the working week, does the shopping, makes the lunches, but also in terms of who does the childcare to produce the next generation. Chances are any equity a couple has is derived partly from waged labour and partly from unwaged. Because the unwaged labour isn't monetized, it's very difficult to put a monetary value on it. Does it add up to tens of thousands over 20 years? In so many cases, you bet it does.

I suppose one to look at it would be: if he'd earned that money over the years, eg if he'd earned £10K more than you each year, would you be giving it to him now?

I think that you are being more than generous offering him the 40k before you split the equity.

If he doesn't like it, let an impartial person (a judge) decide.

I would be stressing how much work you did on the finances.

I think that the things you did to manage the money well should not count in deciding the split, unfortunately. They are just household tasks that were taken on by the more competent person, to the benefit of both.

I think you are being more than generous offering £40K, tbh.
Initially, I thought it would be right to return the £30K he his parents put in at the start, but after all this time, and with the information you then gave about managing your (joint) money since then, it would seem that you wouldn't be in anything like as good a position as you are if you hadn't taken control of the finance / reined in spending / invested / saved / remortgaged, etc.,etc. That whole input more than cancels out the cash he has put in, IMO.

Your entitled to half the house. Equal amounts of pension

I think it's being over complicated.

I think you should split it 50-50. Yes he was given money that he invested some of but it was your dedication and hard work that got you out of debt and created equity. Disregarding the gifted money I can't see any evidence that you H did anything, his parents were generous and you slogged.