How can I protect myself financially? (Unmarried, children involved)

[Pippir]

Figures and dates rounded for simplicity!

I met DP in 2020, he had three children who are with us part-time, and I earned more. In 2022 we bought a house as tenants in common for 400k and I paid all of the 75k deposit (plus fees/costs of about 20k). We agreed a declaration of trust to say, if the house is sold, I get my 75k deposit back plus 90% of additional equity as I was to pay 90% of the mortgage payment. Property prices were rising so this felt like a decent investment for me; better than wasting money on rent.

Fast-forward to now. We have a baby in nursery, I’ve chosen to work part-time and the property value hasn’t risen at all. We now have equity of c. 100k, so if we sold today, I’d get around 97.5k and he’d get 2.5k. He’s had an inheritance of 75k which he wants to spend on an attic conversion to add a bedroom (and I agree) and we both want him to pay 50% of the mortgage, as I’m struggling to on my part-time salary.

How would you update the declaration of trust?

a) first 97.5k to me, next 2.5k to him, 50/50 of anything on top
b) first 97.5k to me, next 77.5k to him, 50/50 of anything on top
c) as we’ll both have put in 75k deposits, first 22.5k to me, next 2.5k to him, split anything else
d) something else

Complicating factors: the 75k of work won’t add 75k of value (probably half of that) but we don’t want to move. He is from a wealthy family and likely to get lots more inheritances over the next few decades. I am not and won’t. We have been going through a rough patch and doing counselling, but hope having more space would help. If we split, I’d be the primary carer of our baby and he wouldn’t pay much maintenance as he already has the three children. For these reasons, I want to protect my own finances.

I have overthought this and can’t make sense of it anymore.

Does kind of feel like the potential for a future inheritance windfall is what is keeping you with him.

This relationship hasn't got a future.

You already resent him over the money.

Bite the bullet and split now rather than further complicating things and putting yourself in a worse position.

but does he pay for half of nursery fees?

I guess “equal financial partnership” isn’t always clear when there’s so many factors: unmarried, blended family, different earnings, different backgrounds.

For instance, I earn more so should I be paying a higher percentage of the bills, even though he has so many more children?

If I pay more of the bills, should I get an equal percentage and say over his family inheritances, even though he wants that earmarked for his children, as much as possible?

It feels like he wants to have his cake (have my higher paying career subsidise his living costs) and eat it (have his inheritance ring fenced for him/his children). But I don’t think that’s intentional and maybe I am overly untrusting.

He does now

Basically you and baby would be financially better off with out him as you are subsidising his children and lifestyle.

You resent him for his financial attitude. It's not going to work long term with fannying about over who pays what. You will come off worse in every situation if you try and be reasonable.

Rip off the plaster and dump.

I wouldn't rewrite the deed of trust in the way you suggested if the relationship is on rocky ground and his is talking of a potential split. The 50:50 of the remaining equity doesn't take into account the years you've spent paying 90%, you need to stagger the change over the years in the future working towards 50:50.

He can essentially pay 2months at 50% contribution and split the remaining equity with you 50/50. I think he's getting his ducks in a row to be honest....

Unemotionally, it doesn’t put me in a worse position to stay. If we can work things out and stay together, that’s better for all the children involved because two incomes make for a nicer home than one.

As a single mother I’d have very little financial support from the government or my child’s dad.

@40YearOldDad suggested another option I think sounds reasonable of protecting my input so if we sold, I’d get the first 75k deposit, the 22.5k of my 90% payments into the equity and the 20k moving costs, then he gets his 75k input plus 2.5k for his 10% payments. Then we go 50/50 after that.

I can’t think of a fairer way to split it. It means I’m not building personal equity until we have over 195k equity, but if we split before that happens, he’s the one who loses out, so it’s more of a risk to him.

The problem with ringfencjng your original deposit and current additional equity as a cash value is that he will benefit from a rise in value iIf the house.

I would express it as a % ownership. So that the value of your investment rises if / when the property value increases.

I got ‘done’ like that. My original big deposit was expressed as a cash sum. By the time we sold the house had almost doubled in value, but I just got my original cash sum back before we split the rest. So ex benefitted from getting half the rise in value of my (v big) deposit.

Basically; you seem to have housed him and his kids, paid for a house where his Dc have a bedroom and yours doesn’t - and you are exhausted as a result.

Meanwhile you have decreased your salary to spend a day with your Dc. Presumably with commensurate reduction in your pension contributions and while he pays half the nursery fees he is not making any contribution that reflects the day that you spend doing unpaid childcare.

I don’t know what the solution is.

Now is not a good time to marry because you have a bigger asset and a bigger income so would lose out on a divorce. But in due course if he does end up with an inheritance and is in a position to re-balance the support you have put into the family so far you would be better off married. (If he doesn’t put the money in trust for his kids / somehow ringfence his inheritance) .

Not sure why you see counselling / mediation as a waste of time and money.

Is there no way of sorting the bedrooms in a "not ideal but better" way on a temporary basis to see if having your own space at least helps a bit, before you spend out on major building works?

If his children's rooms are empty most of the time then can there not be an element of sharing so your DC can be in one of those rooms?

If your relationship is in a precarious position then it seems bad timing to throw money at building works.

I don't think you should get the 22.5k for paying 90% of the mortgage payments, just because you earned more. Equally, it is not fair on him to just get 2.5k for his 10% of payments just because he earned less. You were living together as a couple, and the higher earner should always pay more into the household costs, including mortgage. In return, you got the pleasure of him living with you and the feeling of being in a couple.
Being partners is just that - being partners, each contributing according to their ability. If you earn less, or suddenly become disabled or redundant, you both adjust your household budget and contributions together, without it affecting your respective shares in the property.

The fairest thing is to ignore what you each pay in while living together, apart from the big lump sum for the extension.
So you get 95k ringfenced, he gets 75k ringfenced, and the rest is 50/50.
The erosion of your deposits compared to the (potential) future equity increase is then not too dissimilar.

You are right to stay where you are and extend, even if the cost is not recouped in added value: the value to you as a family is more important.

His potential (not guaranteed) future inheritance is not your business - forget about it until it/if happens.

You paying for the children / step children while he treats himself is a separate issue that needs addressing. You should have a joint current account for all income (his and yours), and all household outgoings including bills, mortgage, all children and household shopping. Then each of you get the same 'personal spending' money transferred to your own accounts to treat yourselves or save as you like.

Either you go deeper into the relationship, accepting joint finances and a true partnership, or it is time to split up.

You’re subsiding his kids, and all of his disposable income goes on himself?

Can you see how messed up that is?

No offence, but God no 😅

I paid 90% of the mortgage but I didn’t earn 90% of the household income. More like 65%. So he had extra cash during this time which he spent on himself.

Why on earth should I pay half of his debts and child maintenance?

Being fair doesn’t mean being a complete mug.

Yes, this is happening for the next three months. To be honest I’ve been the one pushing for SC to keep their rooms because I want them to feel at home here. But now I’m in the full toddler twos it’s very hard.

Yes, which is why it’s changed now, and he pays 50% of the bills, as well as the vast majority of his children’s costs. I still treat them sometimes.

That’s true, but there’s been no rise in value so far, and I would be very surprised if house values ever increase at the rate they used to.

On the whole if we’re putting in fairly similar amounts, and moving to 50/50, I’m happy to take 50% in due course. I just don’t want to lose any of my investment if we split before the equity is high enough to recompense us both.

In the future, I’d be happy to get married if he had a fairly similar amount of inheritance in his accounts to my pensions / investments. I was raised in poverty and I never want that for my child.

I’m very sorry, I think the ‘another bedroom will solve the relationship issues’ is a fallacy. A measure of the relationship that you are supported in your current situation. I definitely would not be making the situation more complicated by letting him ‘invest’ £75k in a loss making venture.

the fact that it isn’t clear how to make this fair shows that it’s not a good way forward together. I’m very sorry, I hope you find a solution.

I know this is not at all helpful, but what on earth possessed you to enter into a relationship with a man with three kids, and massively subsidise them all?

He might be paying his way now, but the fact that he was willing to have you pay vast majority of his and his kids’ costs for years tells you everything about this pisstaker.

How many bedrooms do you currently have, and how many are allocated to his kids? How often are they with you?

50% of the bills isn't fair.

If it was just you him and baby you could have a smaller house, which costs less in tax and running costs.

Because of his three children you have to run a bigger house than your needs - even if those children aren't there.

Plus there's four of them to you and the baby who isn't getting the benefit of said bigger house right now, because there's not enough bedrooms for that.

This you are still unfairly playing over the odds at 50:50. You are subsidising his lifestyle even after this arrangement.

He should be paying on a per room basis and bills should be on per person and how many you are responsible for.

Thus in terms of bills he should be paying for 4.5/6th and you 1.5/6th.

This differs radically from your investment in the house. It should be what you put in initially and then 50:50 thereafter - as it's about your investment in the property. If you put more in, you get that back out.

You are already taking more risk because you have most invested in the house. You have more to lose in your investment.

Go back to work full time. Don’t pay for his children. Start saving as much as you can. Bills split with him paying more as he has three children. Don’t assume he will get any inheritances.

Sorry if this has already been suggested but have you thought about selling up and then pooling your funds to buy somewhere better fitting for your family needs - you could each put £75k deposit down for example and own it 50/50 and split mortgage costs etc going forward

I think this reaction shows that deep down you do not see this as a partnership for life. It is a temporary arrangement for a few years. Mentally and emotionally you already have one foot out the door.

That is okay - you don't have to stay together, it perfectly fine to make that choice.
If I were in your place, I would end it sooner rather than later - why hang around waiting to start the rest of your life?

If you put in 75k and paid most of mortgage for a while now he’s putting in 75k of capital and I presume paying most while your part time if I was him I’d expect the trust to be updated to 50:50 as he’s invested just as much as you and at the moment you seem to think it’s basically all yours

I would not be paying 75k for a loft conversion if this was not agreed

Sorry I see it was 95k you invested . So perhaps change it to something like 60:40 to you. And i agree there should be fairer division of bills