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?

Hi, I'm new, but have been hovering for a while, I read your post and it prompted me to join up. I actually think your husband is being unreasonable in asking for the full 90k, particularly after this amount of time and considering the context of how it was spent.

Your offer is more than fair. Personally I would reconfirm your offer and tell him otherwise you will see him in court for a fifty fifty, because he is not being fair to you.

After a marriage of that length, 50:50 is the only way to do things. If his parents hadn't given you the money then you may have found another way to fund a house, you may not have had a house, you may have made very different career decisions. You have planned your life around the fact that they did give you that money and there are too many different factors at play to assume that your ex should just have it all back. You may even have lost the house totally if you had left him in charge of the cash.

So it's definitely a split down the middle for me.

All that's assuming there are no children involved.

Also, having been through a split myself, I think you need to be careful that any arrangements are not dictated by what would be (in my opinion) an entirely misplaced sense of guilt. It can be difficult when you are the one to end the relationship not to feel a sense of responsibility for doing so, particularly when the other person is unhappy with that decision. Important that this doesn't cloud your judgement with regard to the financial split, which is a very different kettle of fish.

I would give the £90k back to him or his parents, morally I couldn't take their money as it's their family money and would feel very granny and wrong. Then the rest is split equally given you both worked for the mortgage payments.

What they should have done was not be so trusting and put a clause in to ensure their son retained it should something go wrong but hindsight is a wonderful thing and people trust others to do the right thing.

I think 50:50. I think you've been very kind to even be free the 40k. Tell him it's 40k or the courts can decide.

As inthenick has said.

He chose to sink the money he was given into your home - you have worked like a trojan to get BOTH of you fee from debt and financially secure; he is, as you say, getting the benefit of the money which went into renovating the house WHICH HE IS KEEPING. You could be a lot more awkward and demand a straight 50:50 split of the the value of the equity you have in the house, but you are being very ethical and choosing to let him have 40 grand free and clear before you make your split.

He is lucky you are prepared to do this - stick to your guns, and if he quibbles, do as inthenick suggests - get the lawyers in. They will a) come out in your favour and b) cost an arm and a leg, so he will get even less, whereas you will certainly be no worse off than you originally suggested.

I agree with you. I think the original 30k and the invested 20k is essentially gone. I'd suggest that I would accept half the £230k as you explained in your OP.

I think you should just split your assets 50:50. The cash injections came from his parents but the financial management and hard work came from you. He is being unreasonable in my opinion. What does your lawyer say?

I think that you should simply split the equity 50:50.
You have been partners for twenty years, so I feel that entitles you to half the assets of the partnership.

He has had the benefit of your hard work re the financial mess you were in during your early years together, while you have had the benefit of sharing in his parents generosity. He will now go on to benefit from a comfortable home, while you will have to start again from scratch.

How generous do you think he would be had it been your parents giving the gifts? Not very, as he is already out to get as much for himself as possible.

If you go for a 50:50 split, you can always concede a little more in the final settlement if forced to, but if you start by giving him K40, he will put the pressure on to get the rest of the money that he sees as "his".

I think you know the right answer OP.

Depends on what way your moral compass is pointing

I'd definitely say 50/50 due to length of time married, equal debts etc...

He is more than happy to screw you over financially so he gets more but what if you had also had a 'gift' from your DPs? Sounds like he'd be after that too.

You really need to look out for yourself now because am guessing due to your age etc and if you have a job you need to think about buying a property and living expenses going forward etc.

Your offer is more than reasonable. and he will also continue to benefit from rising equity on the property.. Offer him two options. £40k and half the equity or go to court for 50:50 and lose a chunk of the money on court fees.

Morally, If his parents wanted the money back then you should remove that from the joint capital before splitting it, and give it back to them.

However, they don't, so a simple 50/50 split is totally fair.

50:50

Thanks everyone. I do appreciate hearing your opinions. I've only spoken to a couple of very close friends about this so far, and they are of course biased.

I haven't actually consulted a solicitor yet. I was testing the water, to see how much we could amicably sort out ourselves first. This is all quite fresh and has only happened in the past few weeks.

Your offer is more than reasonable. and he will also continue to benefit from rising equity on the property.. Offer him two options. £40k and half the equity or go to court for 50:50 and lose a chunk of the money on court fees.

This. Very reasonable. And he will look like a dick in mediation / court if he has turned down such a reasonable offer.

The first 30k doesn't exist anymore.

The 20k that went into the house had probably contributed to an increase in value.

Either 50:50, or take off the remaining 40k and split 50:50 after that

Really don't understand the people saying you should give him 90k before you split the equity.

I think it is 50/50, legally and morally.

I had a friend in a similar situation. She agreed to let him keep the money from his parents as morally that was right. He was then a massive dick over other things and dragging stuff through solicitors that she ended up wishing she'd never agreed to let him keep it.
I really hope it goes smoothly for you but I'd start off with everything 50:50, at least then you have some bargaining if it does get messy.

I agree with Janice. A pp suggested that you give the first 30k back because without it, you wouldn't have a house but without the op sorting their finances out they very likely wouldn't have a house left either. If he is entitled to the 30k back then the op has effectively paid off their joint debts by herself.

I think your offer to him is very generous and perhaps you are feeling guilt not because it came from his parents but because you are instigating the end of the marriage?

Speak to him again. Say 40k, take it or leave it. Tell him your solicitor has advised a straight 50:50 split (as they will after 11 yrs of marriage and 20 together)

OP - please please please try to sort this out so you get a 'clean break'.

not worked for divorce/family lawyers (as PA) for some time now but the amount of cases we had where husband and wife were squabbling over property/assets etc and of course paying through the nose for it - whereas if you do the 'clean break' - not sure what grounds either of you have - but this can be straightforward and take a short amount of time.

Your assets are quite easily divvied up and if a solicitor/court were to look at this they would probably advise a 50/50 based on the background info.

How is it morally right though?
If he gets that back (when it was used to pay off joint debt) then effectively the op has paid all that debt herself.

I would also, consult a solicitor, most give free half an hour appointments then you can decide whether to go ahead based on that.

Most family/divorce solicitors are also generally fairly empathetic and easy to talk to - but you have to sometimes have a certain 'bond' with them as they are acting for you.

Someone asked about earnings. For the first say ten years or so, I used to earn more than him - around £7k a year more - while he retrained for a new career and worked his way up. Maybe around 4 years ago, his earnings overtook mine by about £10k a year.

In this past year, he has set up his own business and his annual salary is now almost 3 times mine.

We've both always worked full time. And we've always pooled earnings 50:50.

50/50. Marriage is a commitment to join your lives together. So when it goes tits up I think you should split it all down the middle.
And I would say that regardless of which party brought more to the table financially. It's swings and roundabouts, but that's the risk you take. If you don't like it, don't get married. Keep separate finances.