Finances - how will this shake out?

[Zebbug]

I am writing to ask for help understanding how my finances would look after divorce. I'm a bit hesitant to write this post because as a household we are high earning - but that will change once we split and I need help understanding what that will be like, so I can improve my (work, especially) situation in anticipation. There is no abuse but it is not a happy marriage and I would like to put myself in a position to leave.

I have worked at a lower income since having our three children (preschool, primary school). My income is around £20,000 a year, plus £11,000 or so net from renting out my old flat. I work around the children at the moment, ie PT. I have a pension from my last pre-child role worth £6,000, nothing else.

I am wondering now whether I should be saving any spare money I have, or paying it into the BTL flat, because I could use equity in that to help me buy my next home?

DH has a base salary of around £140k a year, plus discretionary annual cash bonus (£20k) and shares bonus, £120k. Works demanding hours. He also has a flat he rents out, like mine bought before we got together. He has a work pension (no idea about its value), shares (£600k, some vested some unvested but with a vesting schedule), around £90k I think of other investment accounts accrued during the past few years.

House is in an expensive area and worth £1.3m. Currently £550k outstanding on mortgage.

How is this likely to shake out after divorce, especially in regard to how I will house the children?

Again - I know these are some large numbers, I'm not posting for fun but because I am battling to get my head around things.

We need more detail to advise, both on the asset and expenditure side of things, and how much time you will both have the children. The length of the marriage also matters.

The value of the investment flat matters, as does your husband’s pension.

If I guess around £2million of total assets, it will still be a ‘needs based’ settlement. If the total assets are considerably more and your expenditure is relatively low, your husband could make arguments about pre marital assets not being in the pot.

Realistically, you should both be able to house your children comfortably. You could probably argue for 70% odd of the assets as you can’t get much of a mortgage. He will argue that his job isn’t that secure, may want to reduce hours to see more of the children and that you can up your earnings a lot.

Most divorces are a negotiation within sensible parameters. Even at your relatively high level of assets and income, a bitter fought court battle can reduce them considerably (think £200k in total), so really should be a last resort.

So rough parameters, you get 60-75% of assets but you are expected to work full time and downsize. If you are both fair it reduces stress on everyone massively.

But, I have incomplete information and am not a solicitor! You do have the luxury of paying £400-800 to have this conversation in detail with an expert.

I’d really advice you to seek legal advice, go and ask a solicitor what they think you could expect in a fair settlement

how ling are you planning to stay and prepare before you leave?

are the children at state school? Would you go to work full time outside of the home? Would you want 50/50 on the access arrangements for the children?

Thank you both very much.

@Newbutoldfather the investment flats are worth about the same as each other (there are two of them, we each kept our old flats), £300k each or so.

@MikeRafone one child is at state school. The other two children aren't school age yet but yes, will go to the local school.

At the moment I work around 30 hours a week. I anticipate that I'd need to work more, and I am trying to make that happen now (it's a bit complicated - I'm self employed but have one main client, is a simple way of putting it). I'm trying to widen what I do.

You asked how long I am planning to stay - I don't know. I want to be in a reasonable position to look after and house the children, and at the moment I am trying to understand whether I need to have a pot of deposit money available / a better job / whatever else.

Access - I really don't want to have a custody battle over the kids, DH wants the best for them as do I so while 50:50 feels unlikely given his work schedule I don't know, I want to be fair.

We've been married over a decade now. Expenditure - not easy to answer. We have one (leased) car, we don't live very extravagantly or have a lot of holidays etc. Nursery fees for two children, holiday clubs. Some spending on renovations but that's wound down recently.

Any spare money you have is a marital asset and not for your exclusive use and is small fry in the overall settlement.

The household income and assets may seem high but this would still be a needs based case given child care responsibilities and the age of the children and wide gap between current earning and earning potential of you and your husband. He is a high earner. You are not.

After a long marriage the starting point is 50:50 split of assets but there is much to be negotiated. It is only a sharing case if there are sufficient assets to house both parties appropriately given focus to children going forward. This doesn’t sound the case if you are scrabbling around to afford to leave. A fair settlement may mean unequal settlement.

You should get legal advice so that you understand what are sole assets and what are marital assets and what would be considered a fair settlement in your personal circumstance.

You definitely need expert advice as there is potentially alot of capital gains tax at play here with 2 flats liable if sold plus the shares on sale etc. if you kept them and sold the currently family home then that would fall liable.

you need to look at estimated net values.

Is the large bonus guaranteed? I presume not if shares based and value could go down as well as up

Hey there just to say that anything that is vested is counted as a marital asset. Anything hitting the bank account be it the shares that vest that are non-contributory or any savings plans through the company that are contributory but the dividends are paid out in shares and then these can be liquidated are marital assets.

for the share save if your husband has that then anything that has matured during the marriage and hit the bank account is a marital asset. Anything that is yet to mature you can claim half of the money that went into it but not the pay out on maturity.

you usually would have to pay for your own legal costs too so put money aside for that and at the least because of the nature of the assets to be divided you’re going to go over £3000 in the division of assets - at the very least.

You have time to get your ducks in a row here. Ideally any shares are vested before you call time and as I said if your husband has share save schemes these need to have matured.

sounds like the properties you both own cancel each other out so maybe leave those out of it.