Divorcing and annoyed about losing equity

[Mumof3confused]

Just coming in here to vent a bit. I was quite smart with my property investments in my 20’s and ended up bailing out my H when he found himself in negative equity after the 2007 crash. We married in 2011 and when we bought a house, put in about £200k into the deposit. Of course I never envisaged us splitting but we now have about £900k equity thanks to me working my socks off to fund a £260k extension on our house (he also works FT so it’s not a case of Stay at hime parent to allow me to further my career).

Just a bit pissed off that he takes half of the equity when he’s been riding on my coattails for the duration of our marriage. I know that’s what he’s entitled to but right now that feels unfair because I’d love to keep the house for the sake of the children’s stability but won’t be able to with this amount of equity. And we only have the equity because I sorted the bloody extension which he didn’t even have anything to do with, none of the planning, stress or financing - nothing.

Get yourself a good lawyer and get negotiating!!!

If he has a decent pension I wouldnt be looking at 50/50 as a start point. At all.
If you will be primary carer your need for accommodation is greater than his.

Eg 2 bed flat = fine for him, you will need a minimum 3 bed

Sorry to sound harsh, but that's how marriage works. It's a financial commitment, nothing more really.

Pensions are a bitch to negotiate during divorce, as they are not taken at true value, plus contributions prior to marriage can be set aside.

I feel for you though, divorce is a nasty business.

I don’t have a solicitor yet…I’d be grateful for any tips on who to contact. It’s early days and I want to get my ducks in a row before telling him I’ve made my mind up.

I’d say we will split 50:50 although I’d do the after-school care on his days too.

I know the pension could be valuable and I’d be more than happy for him to keep that in exchange for a bigger share of the house but I’ve been told that valuing this could be very difficult. Good point re costs to get this valuation making part of the settlement.

@lilly7221w yes of course that’s how it works, and I know it’s ultimately there to protect both partners.

He didn’t get this pension before we married, or at least not before we had children, so I doubt he can ring fence any of it. He has been paying in the max value as well as overpaying as well (for tax reasons) so I do believe it could be valuable.

He isn’t very financially minded so I suspect his stance will depend on whoever advises him - if he gets himself a lawyer they’ll want to get the most out of it for him.

I’m not massively attached to the money I’ve put in to the house itself, but I am attached to the idea of the children having as much stability as possible through this after the upheaval of the pandemic and the build, they are so happy now they have own spaces, and I want a home which they can safely walk to/from school to. Hopefully my husband may see the sense in allowing me to keep the house, as I am the one who is around for them after school and every time someone is sick.

Honestly, you providing hilliard on his days, when you already feel unfairly treated will wear thin.

You need to list all assets and see if you can offset some against the house, in the hope of being able to keep it. If that's what you really want.

I would say, though, don't be so determined to keep the house you cut your own nose off. I have seen a few divorces where the house has been kept but in the long run selling it would have been better for the party that kept the house.

Do you mean providing childcare? I would like to see the children every day so I’d do it for myself and them, not as a favour to him. In reality it’s not many years needed since our youngest is in Year 2. The time will fly and soon they won’t need me as much anyway.

Our assets are literally that: the house, rental flat (about £100k equity) and his pension. Nothing else.

Getting a pension value is easy, he just has to apply to the fund to get a cash equivalent transfer value (cetv). They are used to this and do it all the time. You will have to get that anyway before the court will agree the financial order.

Same here. I did think about having him murdered. Maybe in another life.

@Shehasadiamondinthesky that would be one option I’ve not thought of

@Triotriotrio I believe final value pensions are a completely different kettle of fish.

I would get the whole thing valued; pension, properties etc. He can’t ring fence his pension but everything else is fair game. I also don’t see why you would be doing picking up and dropping of on his days. Either he does it or he pays someone surely?

Hi OP.

I’m not a pension actuary but I have been looking carefully at my various bits of pension, both defined benefit and defined contribution.

The defined benefit contribution is extremely valuable.
The transfer value (cetv) gives a very poor illustration of a DB pension’s value.
(If you wanted to get a better idea, get his existing guaranteed pension - I.e. what his employer would give him at retirement if he moved jobs today - and put it through/ reverse engineer it back through an annuity calculator. That is, the fund needed to buy an annuity of that size. It will be eye opening.)

Personally I would not take say 50% of his transfer value in cash / offset against house equity. But take that % of his pension- ie that part of his pension becomes yours in effect. In payment when it would start getting paid.
Much more valuable. Well worth the fees.

*and of course what I meant to say at the start was “That defined benefit pension is extremely valuable.”
Hope I didn’t confuse matter!

@NorthSouthcatlady

I would get the whole thing valued; pension, properties etc. He can’t ring fence his pension but everything else is fair game. I also don’t see why you would be doing picking up and dropping of on his days. Either he does it or he pays someone surely?

I have a final salary pension, it was still simple

@Bonheurdupasse ok, that is all a little bit over my head and I can’t ask him about any of this detail just yet anyway. Are you saying I should just take my share of his pension at retirement age?

@NorthSouthcatlady I would like to see the children every day, feed them, help with their homework, chat about their day, have play dates. I would much rather that than have him pay for childcare on those days. A few of you seem to think this is madness but I don’t see the issue?

OP

Yes.

Rather than its "cash value" as such (transfer value)

So for ex. say he has accumulated a pension of 10k pa. Current transfer value 150k (crap crap transfer value).

I would rather get 5k pa assigned to me - it effectively becomes your pension - than take the 75k cash / offset against equity.

@Bonheurdupasse

OP

Yes.

Rather than its "cash value" as such (transfer value)

I think the only way I’d have a chance to keep the house would be to trade in the only other assets we have which happens to be pension + flat. The flat ‘only’ has £100k equity in it so not anywhere near enough to make up the equity in our house.

@Bonheurdupasse

So for ex. say he has accumulated a pension of 10k pa. Current transfer value 150k (crap crap transfer value).

I would rather get 5k pa assigned to me - it effectively becomes your pension - than take the 75k cash / offset against equity.

I clearly need to get financial advice but the fact remains, giving up my share of pension is probably the only chance I have of keeping the house.

It's not madness, I did the same until they were old enough to get the bus to his house.

Be prepared for him to not be true to form during the divorce. Honestly I couldn't even believe the crap my EX husband pulled. I never thought he would try to clear out joint accounts etc. Money changes everything.

Be wary of mediation too...expensive!

It's very straightforward to get a cash equivalent value for pension purposes from a final salary scheme, the scheme admin will provide these regularly to members/solicitors

@shortdays

What will the future childcare arrangement be ? If you have the children in a high proportion I think you would get a higher percentage Also in this instance where he hasn't helped further your career doesn't he see the unfairness and would settle for less ?

When does fairness ever come into it? Despite having no children for the first five years of our relationship, my wife never bothered even trying to have a career and quit job after job without having something else lined up because she didn't like the work. When the kids came along she became a SAHP because her earning power was less than the cost of childcare. She proceeded to spend the following nine years dragging our children up whilst glued to her smartphone and sneaking about to see the male version of a sponging loser.

She'll still get 70% of the equity because she "needs" it.

I off set the equity in the house for his pension. I kept the house but had to prove l could afford it alone.

You need a solicitor and to fill in Financial Form E. Ensure you get a Consent order so he can't come after you for more money once divorced

@FutureExH I can totally understand how infuriating this must have been for you. I suppose ultimately childcare costs are not insignificant (I once read that you had to earn £35k to afford a full time nanny?) and there’s no guarantee that nanny won’t also spend their time glued to a smartphone. As for the rest, how unattractive.

@Muchmorethan I guess you had to prove that to the mortgage company? That is the next hurdle, I think. Being self employed banks are not massively keen on lending to me.

[quote Mumof3confused]@FutureExH I can totally understand how infuriating this must have been for you. I suppose ultimately childcare costs are not insignificant (I once read that you had to earn £35k to afford a full time nanny?) and there’s no guarantee that nanny won’t also spend their time glued to a smartphone. As for the rest, how unattractive.

@Muchmorethan I guess you had to prove that to the mortgage company? That is the next hurdle, I think. Being self employed banks are not massively keen on lending to me.[/quote]
A nanny would be expensive but a nursery would be more normal. I think what frustrates me is the lazy assumptions made in divorce (e.g. "she gave up a career", "she contributed to her husband's career," "the SAHP provides an equal contribution" etc).

My wife never bothered having a career to give up. She had her 20s to start one and chose not to. As for my career, everything I've achieved was largely due to what I did instead of watching XFactor in my 20s! Since the children have come along her only "contribution" has been to call me up and whinge whenever I had to do 5 minutes of overtime because she wanted me home to give the children tea and put them to bed. One thing I've learned in lockdown is that it's actually easier doing childcare on a workday when she's not around. It's one less person to look after.

Don't get me wrong, I know SAHPs do make an equal contribution sometimes. My mum did. My sister in law does. My brother does. I just hate the lazy assumption that they all do.

You need to be proactive regarding pensions, get his valued, you may be able to negotiate a bigger share of the equity and a smaller share of the pension.
Focus your energy on this and not who sorted the extension.