Finally separating our finances - is this fair?

[BetsyHolme]

My husband and I separated back in January due to his mental health. We have been in the family home all year. Now, things are finally moving in the right direction, and he is looking for a house.

A little bit of background:
We have been married for 12 years and together for 19, and we have two kids aged 9 and 7. We would like to work out financials between us to avoid animosity. The kids will be 50/50, and I won't challenge him on this as he's a brilliant dad.

He has always worked, albeit not with a big salary, until the past year, when he was unemployed and spending inheritance cash or accruing credit card debt to cover household costs. He is capable of earning a full-time salary in his mid-40s.

I worked full-time until our eldest was born, then didn't work for 5 years, and now I work part-time, 25 hours a week. I earn about 1.5k a month, and I will be entitled to a small amount of universal credit to top up my income to around 2kish once im independent.

Financials:

We have a family home that will be sold in the next few months. This leaves us with equity of approximately 280k—300k.

He is selling his mother's house, and from this sale, he should receive in the region 525 550k.

He has approx 50k in credit card debt (I think)

I have about 15k of debt (including recent car finance I had to take out when my car blew up 😣)

He has been advised that he may be able to ringfence his inheritance from the marital assets, subject to both parties' needs being met. To be honest, I do not want to go after any of the inheritance; I do not view this as mine.

He plans to buy a three-bed house in cash upon completing the sale of his mum's house. I will buy a house with the equity of our family home and with the help of a small mortgage (I can borrow up to about 80k)

Thank you if you have gotten this far!! We are about to start putting down some figures, and I really would like to know what other people think is fair based on my circumstances.

I suspect his idea will be that I stay away from his inheritance, take a majority share of the equity in the family home, and use this as a large deposit on a house, topped up by a small mortgage.

I do have a feeling that he wants a share of the family home equity to pay off his debts; total debts around the 70k mark would take the equity down to approximately 220k. Then, with legal fees and stamp duty, it could be 200k, giving me a budget of around 280k to buy a home. It's not impossible, but certainly not as nice as the one he's buying for 375k.

Pensions are negligible, so I'm not bothered by that.

I want to go in confidently with an objectively fair figure.

Does anyone have any thoughts?

If we need to involve solicitors, then I suppose we will, but the intention is to try and solve the problem ourselves, certainly in this first chat.

So my question is, what do you think is fair? What would you ask for in my position? What is the minimum you would accept?

Thanks so much in advance for any thoughts xx

Ignoring the legalities, I would say fair for you to take all the equity from the family home, since he has far more coming from the inherited house. You can both then house the children equitably.

Oh, and each of you to pay your own debts.

The inheritance isn't included. If you are going 50/50 then it's half the house and any pensions plus what's in the bank

But the inheritance cant be completely discounted from the conversation as it is based on need. If there isnt enough money within the marital assets then other things will be taken into consideration (this is how i understand it)

If he takes 50% of the family home equity he will have 700k cash and I will have 150k which isnt enough to buy a home.

If his debts are going to come from the house equity, so should yours. His idea that his debts come from the house equity is unfair. His inheritance can pay that off.

I think that you you both take on your own debts. You take most of the house equity and don’t touch his inheritance (as the house isn’t sold I believe that you have no claim)

Honestly, I would take proper legal advice.

You’re right in thinking if there isnt enough money within the marital assets then other things should be taken into consideration.

And as an aside I’m always a bit sceptical when fathers want 50:50.

In nearly all the cases I see in real life, on paper it allows the father to avoid paying maintenance, but in reality they rarely truly do 50% of the caring.

It’s always mum who e.g. takes time off work to cover the children’s sickness. I see children being sent off for their 50% time with dad with bags of clean clothes, ironed school uniform, with mum still acting like the diary keeper/reminder system, prompting dad with reminders for homework, non-uniform days, dental appointments, parents evenings, parties, etc.

If it’s truly 50:50, then while they’re with him all of that is his responsibility.

You definitely need legal advice about the inheritance - I understood that unless a Financial Order is in place and a Decree Absolut received then any monies received by either party whether inheritance, lottery wins, or bonuses are considered joint assets and should be included in the marital pot. If this IS correct then it would seem fair that you have the equity from the house and your ex keep his inheritance. And you each pay your own debts and split the costs of selling the family house.

I think he keeps his debts and he keeps his inheritance is morally fair.

Legally, please get proper legal advice.

If it is agreed that the inheritance is his in principle, than you can't argue that it is unfair if he has a nicer house than you.

If the division of the family home as suggested means that you too can afford a house, that can accommodate you and the kids, that will be deemed fair and reasonable.

If you want both of you to have as nice a home, then you do need to include his inheritance. If received after you separated and it was never considered as part of the marriage, you might struggle that you should be entitled to any of it.

Offer

you keep house profits - you pay off your own debt and you will ask for no inheritance - you both keep your own pension

if he says no tell him you want 50pc of the whole pot

Also you say 50/50 with kids - make sure he agrees you are the main carer because you’ll need proof if he denies it

Eork out how you will split their costs going forward

Wouldn’t it be fairest to just split the equity from your marital home 50/50. You pay your debts and he pays his with the equity then use the rest as a deposit for a new home? If your only working part time would it be an option to go back full time so you can lend more on a mortgage?

Thank you for your thoughts.

It was my understanding that although I may not be morally or legally entitled to his inheritance, it is still relevant when we consider how to allocate our marital assets.

In regards to the 50/50, I believe he understands what this entails and hes capable so I hope and have faith that he intends to live up to this.

He keeps the inheritance, you keep the vast majority of the FMH equity - tbh I would go for 100% if it was me.

He pays his debts from the inheritance.

Being "fair" and "amicable" only goes so far, don't do yourself out of future security. His inheritance is more than enough to comfortably house him and the children.

If he wants his inheritance plus a share of the FMH I think he needs to get a grip.

I fully agree he will have a nicer house than me, he has a bigger budget, but I would be looking at something pretty grim if he took 50% of the family home assets if I could get anything at all.

Thank you for your thoughts.

Can i ask what you mean in regards to him saying im the main carer, im not sure I would agree to that...

I'm definitely going to look at taking on more hours once we have both settled into the 50/50. As it stands, I work 9.30 - 3 5 days a week from home, so I have complete flexibility and can do all school pickups. Any extra money I could earn at this stage would likely be wiped out by childcare fees, and if I got another job, it wouldn't be from home. But im not workshy and I will maximise my income wherever I can. Likely not before I apply for a mortgage though sadly.

Hope and faith are not two words that ensure your future. Consult a lawyer to find out what you are entitled to legally.

Do you mean in regard to the custody arrangements or everything in general?

It seems to be a grey area doesnt it. Ive seen both things argued. The fact is I dont want his inheritance! I just want to be able to live and provide a home for me and the kids

@BetsyHolme Who told him it might be possible to ring-fence his inheritance? I know you want to be fair here, but you have been together 19 years, married for 12 and have 2 kids. You are working part time as it suited the family dynamics while you were a family and not separating. Your pension will be less etc. etc.

Even once he has paid his debts from his inheritance he will have a lot more money than you will even if you get all the equity from your current home

Morally fair - inheritance being taken into account while splitting the total amount available equally to each of you. Or better yet, he signs your family home over to you and you take on the mortgage yourself. That won't cost anything like having to sell your current home and buy a new one, so a better use of cash. He uses the equity from his inheritance, to pay his debts and buy himself a new home with the cash released from the inheritance sale. Ideally he should also pay off your £15k debt ( you've been carrying him for a while, since he wasn't working)

I know you don't want to get lawyer's involved but in my view you really should at least check out with a lawyer, as to what a court would likely agree with. Won't cost a bomb for some legal advice. That is the only way you are likely to get a feel for what is 'fair'. As I say, you will have less pension built up, looking after your joint children and shouldn't be undervalued by you.

50/50 care is shit for kids. Proved by all studies. Better to have a base. As someone whose parents did 50/50 from very small it's awful. I ended up moving less and less until I was doing 6month stretches at both. Hated moving regularly and they were 5 minutes away from each other so no big changes of area or anything.

In any case if you even want to attempt it then you'll both need to buy a house with enough rooms in walking distance to secondary school and ideally to each others houses. Therefore I reckon you'd probably need some of the inheritance to afford a house near his.

do not be doing all the school pick ups if you are 50/5. He needs to get used to sorting pickups or alternative childcare on his days then that gives you the flexibility to do more hours should you need to. Don’t fall into the trap of picking them up sorting tea/homework/uniforms for him to pick them up drive them home and put them to bed that is not 50/50. If you don’t start as you mean to go on you might find yourself with difficulties further down the line

I would get legal advice.

My gut feeling of what is fair, is sell the family house, you get all the equity and you clear your debt.
He keeps all is his inheritance.

I agree with this too. 50/50 absolutely does need to mean just that. He is responsible for doing all necessary tasks around this - like school pick ups etc when it is his turn with them. Taking time off if they are sick on his days etc. I am concerned that in your efforts to be 'fair' you are going to find yourself shafted, by trying to be too nice @BetsyHolme