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

Morally, the inheritance should be discounted. It’s your husband’s inheritance, not yours.

Morally, the most important thing is the children having nice homes.

OP you say you don't want his pension but the brute fact is you have ALREADY given him a huge chunk of yours by working part-time all those years in order to enable him to work. You're selling yourself short here.

It’s quite simple you ether touch his inheritance or you don’t
taking anymore than 50% of the equity of the house he will have to subsidise his share with his inheritance which is effective dipping in to his inheritance to finance your extra chunk of the house

tbh I’d suggest taking a bigger chunk of the equity and you pay back the extra bit when the kids are adults and no longer dependents

You. Inheritance can normally be ring fenced as long as it hasn't already gone into the family pot in which case it counts as joint assets. (I suspect, but am not sure, that the cash he inherited and has used as his earnings to pay family bills might mean this is now the case for the whole of the estate.) The split of joint assets starts on a 50/50 basis and is then adjusted based on need. He should simply get much less than 50% of the equity in your house to allow you to buy somewhere decent. Technically this does mean the inheritance is taken into consideration as without it the split of joint assets would, all things being equal, lean more towards 50/50. I'm sorry the solicitor you spoke to was useless but there are better ones out there. Anyone you know who could recommend someone?

In all conscience, if I were to have the means by which to house myself so well I would not wish to see my children's other parent unnecessarily burdened by a mortgage and a significantly smaller house in maybe not such a nice area as it would affect my children. I suspect he wants more of the joint equity as he is having trouble with the idea of going back to work.

You could also offer the option of him giving you some of the equity to be placed as a charge on your new house up to the time the kids have finished their education at which point you'd have to sell and pay him back the money. I'm just signposting an option here, please seek legal advice on the whole shebang.

Despite your current generosity of spirit, please save your future self from being left with a nasty taste in your mouth by giving away more than is fair and reasonable for your needs and take legal advice. Yes it will cost you money but may also save you more in the long run. No one knows what the future holds regarding earnings potential, health etc so please do what you can to shore yourself up now.

Sorry you are going through this OP. Isn't there anyway you could stay in the family home and get the mortgage you may need on that?

These threads are always interesting

when it’s a man’s inheritance then obvs the grandparents would want grandchildren to benefit ( but didn’t actually write them into will) and it must be a marital asset ( he’s used the money as he’s not currently working due to depression /grief), op has sacrificed her career to support to to the meteoric career ( which earns 37k per year) while still only working part time now ) but chooses not to work full time even though could) and doesn’t want to touch inheritance ( but thinks therefore should get 100% of equity on the asset that her ex and get worked and paid for ).

when it’s a women’s inheritance answers are always to ringfence it blah blah.

there should be a change in the law that excludes inheritance but until there is then I guess op he’s fair game

Given that ex will have an inheritance to purchase his own property, why not suggest a mesher- you remain in the family home until the youngest child is 18. Then, the house can be sold and split equally.
I personally wouldn’t be comfortable with forfeiting my share of the family home (that I had also paid into) because I was unfortunate enough to have a parent who died. So I’m looking at it from that angle.

You took a five year break from work and have worked part time for the good of your shared children. You need to be compensated for that in the settlement so you're not disadvantaged.

Both your debts paid from the inheritance. You keep all the equity from the sale of FMH and he can keep his inheritance.

Less the 2 x £10k in puts in Junior ISAs for the kids.

Personally, I think you need to get past the "moral" association with not going after the inheritance. And to be clear, I don't think that wanting an equitable split of marital assets is "going after" anything.

You have been together 19 years, married 12, you have two school age children. Had there not been a breakdown in the relationship, the inheritance - cash and property - would/should have been in the family pot.

Due to circumstance, he has used the cash to cover the absence of his salary. While married, the inheritance should ideally benefit the whole family unit; had he been working the money might have paid off a chunk of mortgage, shared debts, paid for family holidays, school fees, etc. Had he kept the property the rent might be subsidising your family life, or a sale might have paid off the mortgage or set up university fund for the kids.

After a 12-year marriage and a 19-year relationship with two kids, I would expect any inheritance from either side to be for the benefit of all of you, not something that one partner keeps for their own good, as you are now proposing if he keeps his inheritance and then takes 0-40% of the family home equity.

Perhaps the kids will benefit in the long run with a larger inheritance on his side, but they are school age and that's a long time for you to be the "poor relation" with bunk beds if he keeps "his" inheritance and takes equity from the family home.

I think then you need to aim for a nice house and he gets a lovely house for the children and their needs

Nothing of note I dont think x

Some good ideas in here, thank you!

Unfortunately not, our outstanding mortgage on the family home is 140k, which I wouldn't be able to afford or be eligible for. I also dont need a house this big!

Incorrect. I dont know what Im entitled to or should ask for, which is why Im using a forum of people who may have gone through similar to gain some perspective.

His mother loved her grandchildren to pieces so of course she would want them to be provided for, and hes a good dad so he knows that too.

Im not out to fleece anyone, hes my friend and my family. Just because we arent together doesnt mean i want to destroy him or steal his money.

What would you do in my situation @millymollymoomoo, or what would you decide if you were the judge? Would you give me half the family home assets and half the responsibility for the debts? Leaving me with 115k?

Incidentally, if the roles were reversed I wouldn't do that to him.

Thanks for your thoughts. The junior ISAs is a fab idea x

You probably will be eligible for a £140k mortgage either now or in the near future actually. You would need to speak to a specialist broker but there are lenders who would consider child benefit, child maintenance or universal credit in their lending for example. We had one client who earned £13k per annum who on receipt of the other payments was able to lend £170k. I'm probably not allowed to name the broker here but if you Google "Mortgage" "Divorce" and "Mum" then you will probably find one.

In your case, one of two things will be true. Either you will have majority care and receive child maintenance. Or otherwise you will have shared care and can work full time and increase your earnings. I'd be quite surprised if you couldn't lend at least £120k in your circumstances, if not more.

I think I could probably get maybe 100k if I shopped around but its the monthly repayments I worry about.

I may be being overly cautious given this is the first time in my life ive been independent. Im not workshy and I will earn more money its just these are the circumstances Im in now so this is what Im having to base my figures on.

I don't know why you are getting judged for not working full time when your WFH job has fit in with your family without having to pay childcare.
I guess when the joint decision was made this scenario didn't come up. Lesson for us all.
So imo and obviously not legal. You should receive more from the house sale as your immediate future has changed more than your stbxh. He has a cushion which he seems to have been sitting cosy on recently.

Thinking about this some more ... After a 20 year marriage, I'd consider the inheritance family money and want a share. I wouldn't be happy with DH being mortgage free with a financial cushion whilst I had a mortgage.

Hi all!

I wanted to update you on this, partly because it's still ongoing, and I'm still confused. It's a never-ending situation.

To update on the initial post:

We are still living in the same house.
I still earn the same and still receive a small amount of UC
He still doesn't work but will be returning part-time soon.
His mum's house, which is now in his name, is on the market for 495k but has not received much interest, so it may need to be reduced.
I believe he has secured a loan against his mum's home of around 50- 75k to pay off his credit card debt. (the marital debt, which he wants to have back from the equity in the home)

We agreed that he would take 50k from the 300k equity in the family home to pay off the marital debts in his name (some of this is definitely for the benefit of the family; there is no clear answer on what percentage was spent on the missing salary for the two years he was not working). He seemed happy with this. I thought he was being really reasonable and giving us both a really decent start to our independent lives together.

Flash forward four months. I found a 3-bedroom new build in our village for 335k.

The ex then changes his mind and decides that it's not fair that he gets only 50k from the equity. He's been to solicitors, and they have told him that out of a potential marital assets pot of 300-310k, I would legally be entitled to 170k max. He has said he will top this up a little as he feels it's probably unreasonable.

If I max out all of my mortgage borrowing capability and cut down on buying furniture, etc., I can probably afford to give him another 20k, but that would be it.

He argues that I don't need the house I want to buy, as cheaper three-bedroom houses are available within a few miles. My argument is that a three-bedroom semi-detached new build in the same village as the kids' school is not an unreasonable ask, as we are selling a four-bedroom detached new build.

He says im unreasonable. His ability to buy mortgage-free with a budget of up to 450 ish, as opposed to my 228k equity, means he still comes out much better.

At this point, it's gone so far that I don't know what's what. I have an appointment with a solicitor on Monday.

Is it unreasonable to ask for 228k from the equity of the family home? 17k of that would be paying off debts and car finance, and 211k as a deposit for my new home, including stamp duty, etc.

So he walks away debt-free with 75k, his inheritance in his mum's house of approx 500k.

I walk away debt-free with 228k from the family home towards my new home.

He will have slightly more in pensions but only by five grand ish.

My monthly take-home and earning capacity would be similar.

Kids 50/50.

Im going mad with all the figures.

Any thoughts?

Honestly in this situation I think it’s reasonable to get the 3 bed semi you want and get the 228k from the home

its a long marriage, with monies and inheritance interest mingled in family finances /assets.

your solicitor would probably say 50:50 if all inc the inherited house

My thoughts are that you shouldn't take any notice of what your stbxh's solicitor says. They are working for him, and will try to minimise your take. Don't get into arguments with him. Just state your position and hold your line. Your figures look reasonable. But...pensions. Make sure you know exactly what is in his pot and what is in yours. If nothing else, you can use that as a bargaining tool. And don't get sucked into having your solicitors argue with each other on your behalf. That will cost £££. Might be worth setting up a mediation appointment instead.

Thank you both. I really appreciate your feedback. I have a solicitor appointment on Monday so fingers crossed I have something to go back to the ex with.

I guess I make my offer, state my position and then wait. Just as long as its fair that might give me a bit more courage.

I actually thought inheritance is kept put of finances unless the person inheriting put it in a joint account or indicated they wanted to share. In the future you might inherit. I'd suggest if you have 2 DC 50/50 you each claim child benefit for 1 DC. You pension share. You split proceeds of house 50/50. You could go back to work full time then you could lend more on a mortgage. You'd still have a really good deposit. What he has going forward after you divorce won't really be your business anymore. I'm assuming no maintenance will be paid either way for DC. You both repay your own debts.

You can only go with your side to a solicitor and see what they say then bargain from there.
I would think you may get it up a bit from what he is now offering.
I hope you can. Good luck with your solicitor.