Asset split - any experience

[Maybe3ornot]

I have been spending hours on this site and you all have so much experience so wanted to run this past you for your thoughts.

I am going through a divorce,
Two children, 13 and 11.
Husband earns £62k, me £12.5k (I have always worked part time to fit round looking after children, was full time until had children).
Husband owes me £47k in pension after comparing pensions.
He has £5k in savings because refusing to rent, I have no savings as I have been paying all bills and mortgage.
We have £25k in debts which are in my name because he didn’t want in his name because of his job, these are down to cars, holidays etc.
Equity in house is £69k.

The children want to stay in the house, I do, and can raise a mortgage for the outstanding mortgage.

Anyone any experience of % split I could be looking at or what I should be asking for. I don’t want to be unreasonable but he is holding me financially at gun point as only now contributing CM and not contributing towards anything else including debts.

I wish I could help. I hope he moves the fuck on soon.

@Lemmeout thanks. I have always been amicable, but depending on his mental state or relationship status he flips personality and so now everything goes through the solicitor/mediation. Not once have I ever brought up that he cheated and slept with a man whilst we had been together 20 years and 16years, hence the divorce.....accept now to mumsnet 😂 I can laugh about it now as I have a new partner, who I love and the children love. I think he can see how happy we are now and hence no financial support, and wanting everything. I just want the children to be secure and happy, they have been through enough.

Out of interest.... how are you getting a mortgage on £12.5k and such large debts? A family friend is currently working towards the idea of 70:30 asset split I think for a clean break. But their family home will have to be sold and the end is noooo where in sight.

My wages, cm, child benefit and partners contribution means I can get a mortgage for the outstanding mortgage on our property plus all debts. I would need all equity in house though so I was thinking bargain with ex would be, wont touch his pension, won’t touch his savings, no claim of spousal, I keep all debts but I want the £69k equity in house.

My understanding is that if you are living with a new partner and combining finances, then this will reduce your case for more than 50:50 asset split.

If you have £69k in equity and £25k in debt (which you can show is family debt) then you have £44k in assets which would be split 50:50 as a starting point. So £22k each. you could maybe negotiate a larger split of the house in return for shouldering the debts, but could you pay the debt and the mortgage?

I think if you want to keep the equity in the house, you're probably going to need to buy him out to at least some degree and keep all the debt as your responsibility.

If you can afford it I would maybe offer to pay him £10K, in exchange for keeping all the house equity and the debt as a starting point, but not sure where this would leave you in terms of getting a mortgage. This works out as £34k to you and £10K to him, but you'll probably need to negotiate from there.

CMS is calculated completely separately to the split of assets.

If I shoulder the debts and take the mortgage and give him £10k then that would mean I am only getting £12k for the £47k in pension he owes me. Plus he has savings of over £5k.

How about you have all the equity and the debt snd he keeps the extra in pension?

That’s what I am aiming for and he originally offered that and then back tracked 10months ago.

The start point is 50:50

It’s unlikely you’ll get 100% equity in the house.

You and the children might ‘want’ to stay in the house, but it will depend if you can afford to - this means paying the mortgage and upkeep of the house.

Your youngest is 11 - even if you could stay in the house until the youngest is 18, what will you do in 7 years time when you have to sell? The courts have an obligation to consider a clean break. Is it better to face into this now?

On earnings of £12.5k - you will likely get a mortgage for £56k. Can you raise the mortgage to take on the house? Or will your EH have to remain on the mortgage? CM & benefits are only considered by some lenders and they won’t take into account 100%.

It’s unlikely you’ll get SM - he’s not a high earner and women are expected to support themselves & work. Your children are secondary school age - you can work FT.

A £47K pension isn’t worth £47 in cash equivalent. In divorce pensions are valued using the 'cash equivalent transfer value'. This is the amount you'd get if you moved your pension elsewhere and it will be less than the 'fund value'.

As an example, my OH’s EW wanted (he earnt £90k, she earnt £10k - kids were slightly younger than yours):

• SM of £12k a year
• To stay in the house for 12 years until the youngest was 18
• He pay the mortgage (£500 pm) for the 12 years
• 50% of all his pensions. They had been married 9 years. She had no pensions.
• 70% equity in house on sale
• A 3k lump sum

She got:
• SM claim was thrown out of court early on
• She got a cash equivalent of only 1 pension (which was about 1/3 of the paper value)
• She got to stay in the house for 4 years but she paid all bills & mortgage. On sale she got 67%

No one wins in divorce, everyone else is worse off.

@NorthernSpirit. I have a mortgage in principal to take on the outstanding mortgage plus all debts. I pay all mortgage and bills now and for the past year. So I don’t think I am being unreasonable at saying I will pay his half of £10k of debts, I pay the early repayment charge on current mortgage to get him off of £5.5k, I won’t ask for maintenance apart from child and he can keep all of his pension of £47k. He would be giving up £27k in equity in house on a 60/40 split for this.

Your proposal is fair, it’s slightly in his favour.

@Tier10, that’s what I thought but I’m not unreasonable and if I thought like him and put myself first I would sell up and buy myself a nice 2bed flat/house but my kids come first. If they want to stay in the house then I will do what I can to afford it.

@Maybe3ornot

My wages, cm, child benefit and partners contribution means I can get a mortgage for the outstanding mortgage on our property plus all debts. I would need all equity in house though so I was thinking bargain with ex would be, wont touch his pension, won’t touch his savings, no claim of spousal, I keep all debts but I want the £69k equity in house.

Including a partners contribution in an mortgage application comes with quite a few consequences. The lender will need a lot of assurances about his status. It’s also going to have a big impact on your settlement.

As pps have pointed out the pension value is not tangible asset that can be split at the cash equivalent. The overall settlement value might be negligible if you both have one.

Are any of the debts secured against assets like cars? You mention they relate to car purchases.

If I’m honest I think you will get 50% of the net equity, savings and debt. That’s based on the inclusion of you partner in the house purchase. That gives you about £25k.

The existence of the debt unless cleared will be problematic for your mortgage application.

You will be expected to increase your income.

The partner will impact on your entitlement to UC. Which would otherwise be helpful to you.

Really the partner isn’t doing you any favours here.

Broadly, I don’t think what you’re asking for is unreasonable, although as others have said, if it went to court the cohabitation may be taken into account in calculating the asset split; and whilst you state you’ll use not claiming spousal maintenance as a bargaining chip to get more equity, it’s already off the table for you as you’re cohabiting with a new partner.

What stands out though is that your insistence you retain the marital home is based on wanting to keep things stable for your DC; but you’re not even divorced from one man yet and you want to throw yours and your DC’s lots in with a brand new man who would have a huge financial investment in and future entitlement to your home. This isn’t ensuring your DC’s security in their home: what happens when / if you split up from new man in a couple of years time and need to either sell or buy him out of the house? You won’t have the bargaining chips of pension, maintenance or being the main carer of his children to get you a better deal, you’ll be in a much worse position than you are now.

1. You will not be entitled to spousal support as your new partner is living with you therefore it cannot be used as a bargaining chip.

1. Cohabitating with your new partner will bring the financial split more in line with 50/50 as he will be expected to contribute financially to your household, especially as you are expecting a baby with him shortly.

The children want to stay in the house

if I thought like him and put myself first I would sell up and buy myself a nice 2bed flat/house but my kids come first.

The fact your children would like to stay in the house is irrelevant as housing needs, not wants, take priority. If a nice 2 bed flat is adequate to house you & your two existing children then yes, a judge will order the house to be sold & the equity split so your ex can buy himself & the children a property as well; as it stands, he cannot do that on 5k savings.

If your new partner & baby is the only reason a 2 bed flat is now not adequate then your new partner will need to buy your ex out. Your ex will not be expected to give up equity needed to house himself in order to subsidise your new partner & baby.

1. In the absence of your children having SN, you will be expected to maximise your earning capability as your youngest will be entering secondary school (if they aren’t there already). If you need to stay part time because of the new baby however, your ex won’t be penalised for the £62K vs £12.5k wage disparity when it comes to house equity but rather a smaller disparity based on full time earnings.

1. There may not be a 50/50 split of debt depending on assets, for example you mention debt for a car but not the car itself which is an asset. If you are keeping the car then the debt may be considered solely yours or the value of the car could be deducted from your exes share of the debt (or vice versa depending on who has the car). So either you or he, could be liable for more of the debt.

1. A pension pound is not worth the same as it’s cash equivalent so you won’t be able to offset it pound for pound against the house equity.

1. You cannot force your ex to forgo his share of the house equity in exchange for keeping his pension, especially if he needs the cash now in order to put a deposit down on a new house. If he’d rather take the equity & share the pension then you need to accept that as a judge will consider immediate housing needs.

IMPORTANT RE PENSIONS

Pensions are not the same as money. if you have a £300k house and a £300k pension and you said "I'll have the pension, you have the house"' in a divorce, you'd be very much worse off then the person with the house.

An Actuary can work out the equivalences in all monetary values, it's worth it, but it takes many weeks to sort. To be clear a £47k pension will pay out a small amount each month in after retirement, it's not a and is not remotely the same as an equivalent monetary value.

Also, talk to a solicitor about debts in marriage, you might not be responsible for them even if they're in your name. Get advice, possibly if it can be proven the money was used for you both then you might have a case.

Sorry PC glitched so reposted

IMPORTANT RE PENSIONS

Pensions are not the same as money. if you have a £300k house and a £300k pension and you said "I'll have the pension, you have the house"' in a divorce, you'd be very much worse off then the person with the house.

An Actuary can work out the equivalences in all monetary values, it's worth it, but it takes many weeks to sort. To be clear a £47k pension will pay out a small amount each month after retirement, it's not a generous pension and is not remotely the same as an equivalent monetary value.

Also, talk to a solicitor about debts in marriage, you might not be responsible for them even if they're in your name. Get advice, possibly if it can be proven the money was used for you both then you might have a case.

How are you working out he owes you £47k in pension. And you won't get that till he's pensionable age anyway. You will get 50% Of equity in the house and 50% of savings. Maybe more of the equity in the house if it's the family home. And you'll get child maintenance calculated on his salary.

Viviennemary Re

"and you won't get that till he's pensionable age anyway" - it does depend.

I have got a % of STBX's pension as part of a 50-50 split in all assets (I got more house so less pension, but it worked out as 50-50 overall). My pension % has been signed over to me as part of the divorce and I can if I chose take some cash out of it when I am 55 as it's my pension now. I could have agreed to have access to OH's pension at a later stage when STBX turns 65. The actuary's report gave me a range of options to choose from and I chose this put it in my name option.

@PasturesN3w how much did the actuary's report cost? Was it worth it?

It was around £3500 but it is not something that a person with maths skills could do. An actuary works out the precise nature of pensions and how that relates to other asset offsets incl penalties and fluctuations in the market. They are an extremely skilled accountant with precise training. So in this case, if you have to offset a house, monies and poss other pensions, it’s a necessity, not an option.

PS. Actually, the report may have cost less. STBX covered the cost so unsure. Your Solicitor can recommend one for a quote.