Splitting assets on separation - how?

[Newlyseparating]

I have just told DH that I want us to separate. It is a long story, but we have been married 22 yrs and have DC of 12 and 13. We jointly own a good proportion of our house, with a mortgage of around £100k. Neither of us woukd get a mortgage now, as we got ours 20 years ago when we both had proper jobs.

We will have to sell the house at some point. The DC will mostly be with me, though one is at boarding school so is not at home much during term time.

We own four buy to let properties jointly, all with mortgages. They are our sole source of (joint) income.

I think DH and I both need to buy something mortgage free - but how would the monies from the sale of the family home tend to be divided? And would I still be entitled to a 50% share of the rental property income, even though I am the one who has decided that our marriage is intolerable? Our other source of income is his pension - though would he have to use some of that to pay for the children? We also have significant school fee bills to pay, which are scary beyond imagining. Any insights woukd be very welcome...

With no emotion at all (yep impossible I know), you draw up a list of all the assets and a list of liabilities

Value of family home
Value of rented properties
Rental income from properties
Salaries
Pensions

Mortgages
Loans
School Bills
Pension contributions

You then divide by 2 for each.

If you can agree a majority / minority split, if the children are going to stay living principally with you, then do so. Perhaps 55/45? OR 60/40? Or it might be simply 50/50 if both you and your husband are housed and the children are housed at that level.

Then you start balancing. I did this calculating how I could do this for each division 50/50, 55/45, 60/40, 65/35. You might end up owning the family home and having one rental property, with your husband owning 3 rental properties. Or if you cannot afford your own home, then consider how you can downsize costs.

The hard bit, apart from the percentage split, is going to be how do you agree who gets what.

Just on what you wrote and your frankness, if your husband has the same attitude, you should be able to do this either alone or with a mediator and avoid court for the majority.

I have just had to take out bank loans to replace a mortgage as my mortgage provider Woolwich refused to transfer a joint mortgage to sole mortgage.

There is a building society called Ipswich which advertise they welcome mortgage misfits, as you will probably be classified as. The recent FCA report on mis selling of mortgages has left a really hard environment for those trying to remortgage 20 years later, as the big lenders have interpreted the conclusions really severely. Certain people have gone from the safest people to lend to, to the most risky overnight. I am one of them. Even Ipswich turned me down, despite an excellent credit rating, never having missed a mortgage payment in 20 years, never having defaulted on a credit card payment and only in 40s and civil service income. I gave up and took on the loans instead which were so easy to get in comparison.
www.ibs.co.uk/

Has been a bad week!

Thanks for the replies.

Things have moved on a bit.

We have decided that we have to sell the family house. Neither of us would be able to get a mortgage, so we both need a lump sum from the sale so that we can both buy somewhere mortgage-free.

So far, so good.

H, though, is now saying that as he put more into the house in the first place, he should get back the same proportion now. The children will be living principally with me.

We agree that we need to keep the rental properties for the sake of the income - but H is also saying that he should have the greater part of the income, as he put more capital into them. He says I can't expect him to support me as I'm the one who's leaving (albeit because I have lived with over 20 yrs of his unreasonable behaviour...) and that I will just have to get a job. I am not unwilling in principle, but have a doctorate in mediaeval History , gained 25 years ago and never used, and not a bean of work experience, having moved in with him when I was v young. One of the DC is autistic, so that has been a very full-time job for me. We had lived together for about 8 years before getting married and having the children.

He also has considerable, separate, assets which he had before we met. He could easily realise them, but won't.

He also has an occupational pension of around £20,000 per year, and says I am having none of that (though is willing to contribute to the children's expenses).

Can he really claim that I have made no contribution by looking after the children? Our property lettings business has always been shared, in that I own a 99% share of the properties and my looking after the children - enables him to manage the properties. Does anyone have any idea whether he can really do this?

I had hoped we might be able to be reasonable, but I can already see how this could become unpleasant, which is the last thing I want.

He really doesn't get to dictate all that.

Do you have a solicitor yet? You should make that a priority.

But why was he able to put more capital in?
Because you took a career break to raise your (joint) children?!
Don't worry, you are entitled to half & the courts will see it like that

Solicitor, and soon, and it will be very very well worth it financial for you because sadly for him he is talking bollocks.

If you recall, your marriage vows included a bit to the effect of "all that I have I share with you". That was a binding contract.

You have a long marriage, and the assumption will be all assets are assets of the marriage to be split 50:50 on your separation. That includes his 'considerable separate assets' as well as everything since.

And you really don't want to be keeping shared ownership of those rental properties.

Sort out that list of assets and pick up the phone book before he cheats you out of what's yours.

Thanks. I really appreciate these replies, and the kindness implicit in them.

I suspect he will try to hide the pre-marital assets, though I did photograph a lot of them yesterday just in case.

I had thought we might be able to keep the rental properties and split the income, but if he is now saying otherwise, it might be better to sell. I will take legal advice. The problem is that he is very hurt, so is probably saying things that he doesn't mean - but I don't want to rely on that.

Jessie - he wasn't able to, and I'm not sure why he thinks this is the case. The properties were bought with monies generated during the course of our marriage, by both of us (accrued through a combination of him having a lump sum when he gave up work, me having a trust fund, me working freelance for a while when the DC were younger, us doing up a house together and selling it for a large profit, and his pension) I gave up the freelance work when it became clear that the strain of parenting an autistic child essentially alone wasn't compatible with also trying to earn a living. DH agreed with me at the time...

PS I am also talking rot - I did have a job for a whole year (proper professional one), but gave it up when I had DC1. So it feels as if I have not a bean of experience!!!

Stay strong. I know it's hard

Please please do not believe him. The fact you gave up your career will absolutely be recognised by the courts!

Yes yes to obtaining evidence of all of the assets. They are yours too regardless of who's name they are in.

I suggest you see a solicitor ASAP and also advise him to see one. Hopefully his solicitor will tell him he is being very unreasonable and encourage him to give you more assets.

Do not give up easily.

And too right he will pay for the boys that is a legal requirement!

15per cent of his annual income I believe.

I think it may be 20% even.
The thing is if he's hurting it may well turn nasty even if you don't mean it to. We are trying (very hard) to separate amicably at the minute. I've got him to agree to a plan (him move out, rent somewhere, me rent out our spare room to pay mortgage) at least until the dust settles then the kids get to keep their home for the time being then sell in a few years.
Thing is he's coming out with all sorts now like why should I have to move to a grubby flat while you live in luxury here there are no flats for under £650pm (there are, nice ones for £500) but it's all very much hanging in the balance at the moment. As is my sanity. Living with him on a daily basis is properly grinding, he's dropped all basic living with someone rules - loo/sink in a state, clothes all over the floor, walking round the house in boots, even eating, preparing meals separately. And I know he's doing it 'to get back at me' but it's bloody childish and tbh I just want rid. Sorry to hijack

Linerunner - thank you.

QuiteLikely5 - that gives me some hope. The tricky thing is that all our income is joint except for his pension (which he is determined that I'm not having). So quite how he regards this as 'his' is very mysterious. Tax returns for the past however many years show it as shared. That's why I'd thought a 50/50 split of that income would be reasonable, with a share of his pension to cover the fact that the DC will live with me.

At the moment, he seems to have forgotten that his behaviour towards the DC is the reason I have finally made this decision. He is currently regarding it as a decision that I've made because I'm a bit selfish. Though it's possible that he just can't face the thought that his behaviour is responsible, as it must be very hard to hear that. The sad thing is that if he'd ever seen why his behaviour was so intolerable, he would have changed it long ago, and we would still be together.

Jessie - do feel free to hijack as much as you like!! We are so newly separated that DH is still acting in a pretty civilised manner (rather more so than he has for the past however many years, in fact), but living together for anything like any kind of foreseeable future is definitely not an option.

I might have to do the same thing soon, so unfortunately watching with interest. He cannot say you can't have his pension, I don't think it is up to him. Everything is in the pot to be split. He can't just say, nah, I am keeping that.

That's what I'm hoping, Pinkpeter. I have no desire to grab anything from him - but I did give up a potentially good career to look after the children. We were both more than happy with this decision until I said we should separate...

1. There is no fault divorce in English law (assume you are in England not Scotland by the way as divorce laws vary between the two). So it does not matter if one of you had 40 lovers or beat the other up the money side is not affected.
2. He is wrong that what he put in before marriage affects things in this case of a long marriage with children including presumably one at boarding school and one at home at a day school.
3. He is already drawing his pension income I think you said and your only other income is rent from jointly held buy to let flats. I suspect you might both be better off keeping the buy to lets than getting cash and putting it in the building society to get 0.5% on the capital. So unless you need to sell the let properties in order to buy somewhere to live I would just sell the family home, pay off the £100k mortgage and split the proceeds.

1. It may be that you both need to get back to full time work to be honest even if you both only earn £20k a year doing it each as you have boarding school fees to fund and will have 2 households to keep. That presumably is a practical solution for you both even if you end up working in a shop.

1. remember older children can choose the parent they live with. I have a friend who waited until the youngest child was 13 before divorcing so the children could pack and they chose to live with the father (they were both a boarding school and mother had new lover she'd run off with). Do you know which of you the children are likely to want to live with most as that parent probably needs more of the money and more of the financial support.

Thanks for the v thoughtful reply, Lotuslight. I'll take your points in order.

1. Yes, in England! I had thought behaviour didn't come into it (his has been unreasonable, but I'm taking positive steps to escape from that - I have no expectation that it would ever come into any settlement.)

1. That's what I'm hoping!

1. I completely agree. I think we should keep the student lets and split the income 50/50. They don't need to be sold if we sell the family house (which is anyway far too big for either of us, even with the DC in it). I would be perfectly happy with a 50/50 split from the sale of the house, just for the sake of goodwill, even though...

5 The DC will undoubtedly choose to live with me. I will have to encourage them to see their father (which I will gladly do).

1. I am still needed at home in the holidays due to one of the DC's autism. I am very happy to work full time during term time, though, and would gladly take on a menial type job (probably all a PhD in mediaeval History prepares you for )

Annoyingly, selling his additional assets would probably mean that neither of us had to work full-time - though I think he is going to try to hide them. He also has money in a foreign bank account - not lots, but I think he might try to hide this too. I did a lot of photocopying this morning, so will see what else I can find. All that said, it would by far be best to keep things as pleasant and civilised as possible.

The additional assets definitely go into the pot to be divided and any money abroad. Pensions are interesting now as you can get them as cash at 55 BUT he is already drawing his I think so that is now just income as he probably has an annuity or final salary pension in payment.

It might even make sense to transfer two buy to lets into your name and 2 into his so there is no complication down the line with joint ownership, joint management etc unless there are mortgages on them that will not be allowed to be transferred. You will need some tax advice on this kind of thing though. I suppose if it's a gift between spouses there is probably no capital gains tax at a transfer for zero payment between just the two of you but I might be wrong. If there is no mortgage on the buy to lets then no stamp duty on a transfer into a sole name either. If there are mortgages on them then they will probably just have to stay as they are although it will link you both together for along while and you'll need some kind of agreement as to what happens if one of you wants to sell their half in the future.

The most important legal thing of all is if you reach agreement even if you write it down that can be totally overturned later unless you get it written into a consent order which is sealed by the court - usually before decree absolute so you might think you had agreement and later he applies to court to settle finances and wants more so do once you reach an agreement get it drawn up by a solicitor into a consent order and have it sealed by the court to settle the divorce finances.

I am not sure what happens when one spouse only has pension income and no earned income for either of them in terms of paying towards the lower earner spouse. If the buy to lets remain in joint names and income shared that is just sharing a capital asset in joint names. His pension in payment presumably he may have to pay you some of at least until you reach state retirement age of 67 or whatever it now is.

Term time jobs can be hard to find but worth looking for. You might even be able to get a job in the boarding school your child goes to with accommodation provided there even as one solution. One of our children had virtually free school fees (15%) from age 4 - 12 as his father taught at the school and we had a school flat for 6 months at the start

LotusLight, thank you. There is a lot to digest here. A friend has given me the phone number of a solicitor with whom she had an hour's free consultation before separating with her own husband - so I will investigate that tomorrow.

I am hoping that DH will at least make a contribution towards the DC from his pension, even if I'm not entitled to anything. My starting point is that we should keep the properties and split the income 50/50. I have a greater percentage of their ownership on the deeds, but I don't imagine that means anything much. I certainly don't want to sell them as I would have no income at all without them, and the plan was always for them to be my pension fund as I gave up a fantastic pension when I stopped working (the pension was one of the best parts of my job).

I will investigate all job possibilities too. I am very reluctant to move the DC who is still at home with me, as he is happy and settled with school and friends - and the boarder is a very long way away from home. Plus I would lose my family and friends, who I feel I need at the mo! The DC would of course essentially lose DH too (we are planning to live close enough to one another for the DC to be able to see him as they choose). But nothing is set in stone, and I will have to be open minded.

You are right that ownership on the deeds does not matter if you are married (it does if unmarried) particularly after a long marriage.

If your husband's pension income is say £20k a year and the income from the buy to lets is £20k then it may be fair that you keep all the buy to lets and he keeps his pension income. It depends on the relative value of each and I suppose the net receipt point. If you don't use your £10k a year annual income tax allowance (although you may get tax credits for the children once you split which are they taxable?) then £10k to you may be more than £10k to him as his pension income is probably taxed. I am assuming boarding school fees are £30k and you might have day school fees for the other child of £15k a year.

If the pension income is higher than the buy to let income after deduction of all the costs of buy to lets - fitting new boilers etc then it would certainly seem fair you keep all the buy to let income and those properties go into your name (if no mortgage on them). It just depends on the numbers.

Yes, definitely see a solicitor. Even if you just see a good one and pay for one hour of advice rather than just an initial free chat with one it would be money well spent.

Are you still living together? We did until final decree absolute, court financial consent order and transfer of property which was 7 very long month for me but he was advised not to leave the home until everything was settled. At least it means we had 100% knowledge of the finances of the other and could negotiate at home.

Hi Lotuslight. Thanks for this. Yes, we have no choice but to live together until we can sell - plus we don't want to let on to the DC until DC1 is home from school. We are both perfectly able to pretend that nothing is wrong.min fact, he has been relatively civilised and polite - and I have been much less withdrawn now I can see an end in sight (even if it takes a while to get there).
I am seeing a solicitor later this week to get some basic idea of how we could divide the incomes and properties in a way that seems fair to both of us. I don't think we want to sell the lets, as we would have to pay CGT. Your suggestion of splitting it along the lines of : his pension / rental income is an interesting one, and one that I will investigate. I would ideally need a bit more as the DC will be living with me and there is no guarantee that they would overnight with him. We will have to see how that goes once we are at that point. Your school fee estimates are pretty much spot on, by the way!

So you would need to agree who pays the school fees eg I do in our case (earn 10x what he does). Other couples pay half each out of their income or whatever is agreed. Plus look at what might happen in future - eg if you are relying on part of his pension income and he dies and you won't then get a widow pension even though his pension is probably lower now because you are married and would get a widow's pension so you might want to insure his life. Secondly it is possible the government might change the rules/law on buy to let in future although you don't have a mortgage i think on the lets so any changes might not affect you but if you did and they suddenly said mortgage interest not allowable and that was a huge difference that would affect your income if you were relying on that although that kind of change is probably hard to determine. If the buy to lets went into your name then you would be liable from the rents to pay insurance and all the other costs. Still sounds the best solution plus getting a bit of his pension income too (and trying to get some kind of job as I think money is going to be quite tight).

I was very keen the 5 children stayed in their own home as divorce is disrupting enough without having to move so took on a £1.3m loan to pay out my ex and we had a mortgage already, which has been quite scary. We didn't mention the divorce to anyone and not the younger children until very close to the time we parted and he moved out so that can certainly work. It is vital to get the finances set out in writing and sealed in a court order at the court . Lots of people do not do that last stage and then later their spouse even 10 years later can come back to claim more even if they've inherited or won the lottery or got a work bonus in that period.