Advice please re financial settlement

[OnACloud]

Hi, I’m looking for advice on fair and sensible financial settlements. I know that eventually we will need legal input but to keep costs down I’d like us to be able to agree as much as we can between us.

Background: married 28 years, 2 children both young adults but living at home rent free (students). Not dependent in legal terms but we agreed jointly (and still do agree) that we will support them through their education).

DH’s earning and earning potential is much higher than mine (currently about 3 times higher but has been 10 times in the past). Partly this is due to skills, education etc but partly because I was a stay at home mum and also followed him around the country while he pursued his career (I did this willingly). Also, as children got older I worked and still do work part time to allow me to be more present and supportive at home (one child with mild additional needs). I would struggle to get a mortgage, where as he wouldn’t.

Pensions: DH’s is significantly better than mine.

House: when we sell we will have about £375 equity. The children have chosen to live with me so I will want a house adequate for this.

DH feels responsible and guilty about the marriage breakdown (he was unfaithful) and says I can have whatever I need for a financially stable future but I’m aware that that is probably irrelevant in the eyes of the law.

I don’t want to take the p*{! but I do want to be sensible about my future.

My quiesrion is, What would a court deem to be reasonable in this situation? If I said I wanted the house and half his pension he would agree but I know this is not practical or fair.

Any knowledgable advice much appreciated.

@HannahinHampshire
out if interest why did a judge feel you needed a mortgage free home? Most people on divorce can’t achieve that

op it also makes a doffetence re your age. Ie if early 40s vs late 50s
ie do you 20 years yo pay a mortgage and contribute to a pension, if he was left with virtually no equity could he get a mortgage based on his age?

The 2 crucial pieces of info are your ages and his salary

Infidelity/reason for marriage breakdown is irrelevant for the purposes of financial settlement.

Unless your adult children have additional needs that prevent them from working/living independently then it won't be deemed necessary for either of you to house them. Similarly you will be expected to work full time to supporr/house yourself.

The time you took out of the workplace to care for children and to facilitate geographic moves for his career is relevant but how much that translates to is up for discussion?

How old are you? Relevant for retraining/pension.

60k. It’s his own company which is growing so that will change if it continues to improve (carries risk as well I suppose)

I’m 51 and have just retrained for a promotion. The only way I could progress in my current work environment would be to get a degree.
I know there’s no legal obligation to support the kids but we both agree that I will have a house to house them for as long as required, as we would have done if we weren’t separating.

Another two years of student life and as long as I have a home I’m happy to support them financially (and that’s only a roof and food, we don’t pay for their clothing or social lives).

A decent house (but smaller than the current one) would be about £325. That would be a sacrifice in terms of location and space which is fine. It would be hard to get 3 beds of any sort under £300.

His pension is very good compared to mine.

So I don’t think that this is a huge wage. It is higher than the average salary but not at a level where he could manage very well without a reasonable division of assets. How much is in his pension? Maybe ask for a larger share of the house equity, in exchange for him keeping the pension ( unless his pension is huge).

Ask for 50 percent of equity, pension share so 50 percent of joint pension and ask him to pay the legal cost of the divorce because he cheated. Remember although it is tempting to ask for more equity now and less pension you will also need pension too.

But is his pension pot £375k, same as the house equity?
Or only £100k?
Or £2million?

It makes a big difference on suggesting % splits..!

I think if I were you, I would come up together with some agreed principles and then look at the numbers. E.g. you might agree:

You both should be owner occupiers - i.e. he needs enough capital for a deposit given what he can mortgage

You should have a similar level of income in retirement - calculate how much you can up your pension if you go full time from now to retirement + the value of your existing pension, subtracted from the value of his pension projection at retirement age

Obviously you might have different principles to work from but you get the idea

50:50 is fair. If you already have your own pension, you wouldn’t get 50% of his pension as well. It all goes into the pot and split in half. You’d be expected to work full time & build up your own pension from now on.

What other assets are there apart from equity and pensions?

How much might you earning now, and how much might your pension be worth now if you hadn't sacrificed your career for your family's benefit?

Work this out, get ALL financial documents together and see an experienced family solicitor.

Also look at Wikivorce and Divorce for Dummies.

His pension pot is currently valued at 240k and the plan is to throw money into it in the next ten years as the company grows.

£60k is not a decent salary for a person in their 50s looking to buy a house with no cash though. You need to get a full time job, calculate what his pension is worth, stop being a bit of a martyr doing up the house - a lick of paint wont increase the value!
Have you thought of agreeing for you to stay in the house until your DC are, say, 21 and finish Uni? By that point you will have got your full time higher salary job, you’ll be in a better position to decide a fair financial split too.

But this plan will have to change though. What is your pension worth?

I really need to seek professional advice but I bulked at the £275 an hour I was quoted. And the problem isn’t that we can’t speak civilly it’s knowing what’s fair to us both. He feels guilty and wants to give most to me but I can’t accept this. I feel sorry for him for the life he has at the moment (I keep having to remind myself it was his choice).

He can potentially do this if the company continues to grow. My biggest pension is valued at £1,100 a year. I need to check my new one but I’ve only been in the job for 3 years.

I'm confused at a lot of people saying 50/50. Does op not being a trailing spouse and sahm (by mutual agreement) count for nothing? He also owns a business which becomes a joint asset too so he will need to buy you out of that assuming it has physical value beyond him. 50/50 would be the case in a relatively equal relationship with a long marriage. This isn't the case.

She is housing children who are still in education, on be child needs additional support, his earnings and mortgage potential is higher.

I would request 60/40 personally, so the house plus whatever is needed from the pension to top up yours. This hopefully is somewhere between what he has generously offered you, and 50/50 which I think pretty unfair to you. Alternatively. Split the difference between his offer and 50/50.

Does the business have a quantifiable value? Calculate your total joint assets, house, cars pensions, savings, business value and work it out from there.

Really? A martyr? You have no idea what I have been through.
I haven’t said I will take full equity, that is what he has offered.
He currently pays himself 60k from his new business. He has potential to earn a lot more and has done in the past.
this is not about me being greedy. This is me trying to decide what the right thing to do is because he can’t come up with sensible ideas and I’m thing to be fair to us both while trying to decide my future.

Fair would be more like

60% equity
50% pension
tou get a full time job

he needs decent equity to be able to buy a house, you need slightly more to house yourself on less income
pensions equalised.

you both then have 15 more years to find mortgages/pension pots independently

what is the business? Is it just him or are there employees etc

Completely agree that 50:50 would be unfair on the OP. She's sacrificed earning potential over many years to bring up children and facilitate her husband's career. If pensions and assets were split equally she'd immediately be in a worse position than him.

Goodness me.

75% of the house
30% of his pension

Dont feel guilty. His financial potential is strong and yours isn’t.

You don’t stay at home for 30 years to then only walk away with half of everything.

Strike while the iron is hot.

You feel sorry for him now BUT wait until a year or two when he has a new woman on his arm, they buy a wonderful property together, start going on fabulous holidays - THEN you will sorely regret your decision to take what is ‘fair’.

Also the state pension is about 8.5k a year which is nothing really. So you do need to take some of his.

Similarly you have said he is running his own business - WHAT?! You want none of the wealth from that? WHY?

Time to get angry!

Where are the savings? How much? Have you seen how much is in his business account?!

HE WILL move on, you will easily be a distant memory so take him for every god damn penny.

Good luck and you can thank me later! (Also he is fooling you by pretending he is being generous giving you half the house 🤔)

There are three employees. He has created a subscription product, there are no physical assets except for IT. It’s very niche but he’s doing well. He’s put a lot of effort into it and produced something quite brilliant. His plan is to build it and sell it. I own some shares which I would happily give to him. I don’t have my own income from it.

Why not retain some shares and earn from it either through dividends ( if limited co) or capital growth ( selling shares at later time?)

Just to clarify, he says I can have the whole house, not half.
I have to admit that I am transitioning from sadness to anger, which I guess is why I’m starting to look at all this with less emotion.

I do pity what his life has become and I have to remind myself of the choices he made!

And I don’t think it will be a year before he has a new woman on his arm….

That is a possibility