Is this a fair split?

[PinePinePine]

I know it gets asked all the time. I have a bit of legal advice from last year but things have changed since then a bit. I'd really appreciate your views on whether I'm being fair. I will take all emotion out of it and be as factual as possible.

Married: 6 years.

House: (roughly) £650k. Roughly 50% equity to mortgage. All equity (300k) put in by me from money inherited & saved pre marriage.

Income: £78 (me) £44 (him). Both work full time. Neither of us gave up work for DC or reduced hours. He had higer paying job before but didn't like the commute so quit. He could get higher paying job again - maybe up to roughly same as me - he might argue not anymore.

Cars: both bought by me. both in my name only. worth £8k each. (roughly)

Pension: £35k (me), £250k (him).

Debt: £6k credit card (me), £0 (him)

Savings: Barely anything - he might have a tiny bit. I don't know. But nothing significant.

What about the following offer: (presuming 5050 DC)

He has £50k equity from the house, keeps his own pension, and whatever one of the cars he wants, and he doesn't need to worry about my debt.

Would you think that was fair?

I guess the question would be, can he afford a house with a £50k deposit and his mortgage capacity in your area? It would need to be a suitable size to house DC depending on their ages.

he could buy himself a flat with his salary and £50k deposit. we have 2 young DC so they would need to share a bedroom. or he could rent a nice 3 bed in town. he could definitely house our DC but he might not be able to buy somewhere unless he's happy in a flat.

Could he insist that he wants to buy somewhere & isn't happy renting and demand more equity? in which case - i would take some of his pension i guess to level it out?

we earn differnet amounts but not crazy different amounts. we always earnt the same until recently.

Is your plan to try and buy him out and remain in the family home?

I would say it might be reasonable to expect him to have a house if thats what he is used to, but ultimately it would come down to his own preference (keeping his pension in tact and being in a flat, or doing a pension sharing arrangement and being in a house)

How amicable are things at present? If you are hoping to stay in the family home and can afford to take over the mortgage yourself you obviously need to know what level of financial up front payment you can offer him before this option is no longer financially viable

The only difference the salaries make is a slight difference in borrowing ability, but there would be no spousal maintenance claim at this level I wouldn't have thought

Equity split seems low to him

as the lower earner his mortgage capacity is lower so arguably he needs more equity than you. You keeping 250k liquid asset plus with higher salary doesn’t seem right- but of course you’d need to look attentions and also bring that in

I would warn you that if you go to court they may not look at the amount you put in through inheritance, if it was a few years ago. My DBiL bought up his teenage DS and just before his wife walked out he'd paid off the mortgage with inheritance. Covid meant the financial settlement dates came and went 3 times before it was, finally, sorted and he ended up with 50/50. Her mother had, recently, passed and none of that inheritance, including a house, was taken into consideration. He did keep his pension.
Try to settle amicably rather than Court.

Seems pretty fair to me but he might say no. How come your pension is so small when you earn almost £80k.

@millymollymoomoo i agree equity seems low - but we both end up with similar assests but mine is cash, and his is pension. he's late 40s so would be concerned about pension, I am in my 30s. i realise it's a long shot.

£50k is the most I can afford to stay in family home.

If he forces me to sell to give him more equity - then I just get more of his pension i guess?

@FatfunandADHD yes exactly. i want to stay in family home to retain stability fo my autistic son. and £50k is the most i think i can afford in order to do that. but i will leave his much much larger pension alone, sign over a car, not bring my debt into it,

@Mittye because i've only started earnign that recently and because he contributes v little towards the childcare or house costs - giving me few hundred quid when he can - so i have not been able to pay into pension and have got into debt.

I would personally get on the phone to a mortgage broker and your current mortgage company and be sure what you could borrow on your own. You need to be able to pay down the mortgage (if it needs to be) and have the equity to pay him. Armed with that figure where you are 100% sure then depending on your relationship I would explain this to him that for the sake of the children you would prefer to remain in the home but to do this your offer would be X.

I say this approach only if you are still being fairly amicable and there is no abuse etc.

You could explain to him that by sorting this out between yourselves you could save £10k + each in legal fees and see if he can see the value of the deal.

I think if this went to court you would most likely end up giving away more cash equity and a pension share as a court would put some value on him being re-homed somewhere more than a flat as I presume a 50/50 split of the equity £150k each would enable both parties to put a deposit down on a smaller but adequately sized house.

A lot will turn on whether you have children and whether you were together before you married which would determine the length of the relationship. The family home may be too big for needs. If the children could share as you have stated then you both need a 2 bed flats. I don’t see how 50k and mortgage gets him a home but not you if he earns less.

@LemonTT sure - ok - so that seems fairer i guess? so we both end up with 2 bed flats and i take half his pension. he will not be happy about that as he wanted to retire in 10 years but if that is fairer - so be it.

i just wanted to establish whether pension amount is seen as equal to house equity. if i leave his pension alone and buy him out to tune of £50k then we both have roughly same asset wise.

oh also @LemonTT - dating for 2 years before marriage.

thank you for your help. it's giving me a reality check i guess.

It very much can be taken this way. What is fair is either what you both think is fair... or if you can not decide then a court will decide.

If he wants to retain his pension then it can be offset against house equity, its not always done on a £1 by £1 value with pensions.

Ultimately what you are looking for is a value to allow you both to move forward. I think you are being incredibly fair because you are not trying to ring fence your inheritance (many would try to) and you are offering him a car. For all purposes if the car is worth £8k and is paid off there is nothing stopping him selling it and having the cash instead and buying a very cheap run around.

thanks @FatfunandADHD i know i'm not viewing it through a cold legal lens - but i don't want any of his pension (despite barely having one myself) as he built that up by working in a public sector job for decades. but also - i don't think he should have half the equity in the house when it's inheritance/savings from before we met - and he has used that large equity as a cushion meaning he can quit the job with the long commute and take a worse paid one a short walk away.

i would much prefer for us to both walk away with what we came into the marriage with.

i don't even know if wants 5050. he finds looking after our autistic son very challenging. but i'm working on that basis but guess if he doesn't want to do that then perhaps changes things again.

maybe i could get more than 50k to buy him out. i'll speak to a mortgage advisor but from using calclators online - it's not looking likely.

I’d say he is getting the better end of that deal.

I’d potentially want some of his pension as a trade off on the equity… that allows you to move forward buttttt it evens things up a bit and accounts for the fact had reduced pension opportunities due to maternity leave.

in fact I’d probably offer as much house equity as I could but stay in the home against pension and prob try and deal it as doing him a favour but i work in commercials and am pretty cold about these things / always want to negotiate hard 🙈

BUT I’d really want to agree it on your own / with mediation not in court

It sounds a little like you want the best of both worlds tbh. You received your inheritance and savings pre marriage, he would have acquired most of his pension pre marriage too. I presume you didn’t ring fence your contribution? He earns less than you and is significantly older than you so has less opportunity to build up a depleted pension than you.
So between you, you have £325k equity and combined pensions of £285k, with debts of £6k. It seems doubtful that you’d be able to stay in the house, as a single parent on your income you may find it difficult to meet affordability for the mortgage. You won’t receive hard cash if he has to give you some of his pension, it’ll go into your pension pot and only be accessible when he is able to access it - possibly at 55.

why do i want best of both worlds @Soontobe60

I don't want any of his pension. as you say he's older and has less time to build up depleted pension - hence why i think it's fair for him to retain his whole but i have a greater % of the equity (that I put in).

i can borrow £350k on my salary. which means i can stay in the home and he can have £50k cash and to keep all his pension.

i did not ring fence my contribution as my solicitor told me it would be a waste of time as we had got married at that point and therefore it was a joint asset.

You can agree to net house equity against pension if you both agree to it.

I would suggest that in fairness you keep (or retain in the house) the money you put in, he keeps his pension, everything else split 50/50. No child maintenance unless you have them significantly more. Try to stay amicable even if you end up with slightly less because the solicitor will be the only winner if you fight and in the long run you share children so will need to have contact for many years to come - trust me, we now at the kids getting married stage and navigating blended families at a wedding!

I think a lot depends on how much it will cost him to be adequately housed with space for the children

@mitogoshi depends if he wants to buy.

If he wants to buy somewhere with 3 beds then he will need more equity than I can afford. So in that case we sell the family home, we split the equity 5050, and I take half his pension.

If he's happy to rent - he walks away with his pension untouched and 50k cash.

I guess it's up to him which is preferable. But those seem like the two options?

There is roughly £350k to be split. If he has £250k in his pension then you need to give him £100k....not £50k.

Also, as you pointed out, your £350k is mostly equity.....his is pension. He cant liquidate his like you can without a high tax liability.

He also earns much less than you so has a much lower mortgage capacity.

If I was him I wouldnt be agreeing to this at all & would be telling him to lawyer up asap.

If I give him 100k @Biggaybear I end up with £235k and he ends up with £350k surely?

Also doesn't earning capacity come into it? He left a higher paid job recently.