Advice - clean break vs Mesher order

[ItAllShallPass]

Hi. Separating from wife of 5 years (together for 15) with two kids under age of 10. We are both in our 40’s. I’ve just moved to a new 2 bed rental temporarily until I figure out what next. Kids will primarily stay with their mum and visit 1-2 nights per week plus hols.

I have been the only earner working in tech since we got together as she quit her job > 10 years ago and never got back into work after kids.

Our marital assets are c £1.5m including main home c £800k equity (£600k outstanding mortgage), ISA savings of c £250k, pension of c £100k and deferred stock of £350k.

Starting with a 50/50 split, she would have c £750k of equity but no income and no ability to pay mortgage. Solicitor advising me that the court would favour a clean break where the house is sold, she takes all or the majority of the equity in it and then she rehouses in a smaller property around £1m. Means it’s a 66/33 split in her favour (or possibly 70/30) and we go our separate ways. I will have to pay spousal maintenance (plus CMS) until she earns again.

I feel this is too disruptive for the kids and costly with stamp duty. I could offer to pay down the full mortgage so the house is debt free over a time period and we defer the sale until the future (15 years for youngest to reach 18!!!) but means I need to pay £600k of outstanding mortgage (£300k on her behalf assuming we maintain 50/50 split). The net financial result is the same for me except that I tie up my equity in this house and limit my option to buy a new home for me (+ potential CGT implications when selling in the future….).

I have always considered the house to be a security for the kids in the future so I don’t mind the mesher arrangement but I worry about being tied in with future ex; what if there are major repairs, maintenance works or another partner moves in….! Plus all the emotional baggage…

The other consideration is that I need to pay spousal maintenance for a period until she starts working again. I think she could easily get a PT job today but she is retraining in a new field and claims she won’t be able to work or earn for another few years. I feel thats unfair because she can easily earn £30k if she picks up a similar job to what she did previously and grow that to £40-50k in a few years.

Maintaining the home means i will need to commit c £3-4k of monthly mortgage on top of my new rental costs and all maintenance…. Not sure how I keep that up in addition to supporting two homes even if I’m on a high salary (net after tax c £10k of per month + some bonus).

Welcome any advice.

you should be looking to sell the home, split all assets, get downside if necessary ( she shouldn’t need a mortgage at all) and get rid of the spousal claim.

mesher sounds like a terrible idea, and certainly not for 15 years. There are enough assets her to get a clean break and dismiss a spousal maintenance claim.

I think you need a clean break.
Also, spousal maintainance is rarely granted in the UK.

Kids can cope with house move.
Presumably same area so no difference for schools etc.
Clean break.

Mesher is now rare for good reasons, including the children's best interests. Moving at 18 isn't ideal for them so best to resolve now.

Take the pain of a move now..she will need to maximise her earnings unless there are issues with children health. A judge will tell her this. Avoid court because it will cost circa £50k.

CMS can be used for mortgage calculations if court ordered.

I admire your attitude to disrupting the children but a divorce means upheaval and often it's best to get it out of the way earlier. I would suggest you look at an asset split so she can have a mortgage free house or close to it (it will be a downsize but that's the reality of divorce). Be more generous on CMS, certainly for a shorter period, 3-5 years which will allow her time to rebuild her income.

If she doesn't have a pension she will need to start earning so it's in her interests to get back into work. It may feel daunting for her but she's probably more capable than she realises as raising children can make you feel less confident in the workplace.

Thanks for the responses. I agree clean break seems like the easiest option.

I’m surprised about the comment around spousal maintenance. I’ve been told by two solicitors that I would need to maintain a certain living standard for ex wife and kids based on our current lifestyle. We have been spending over our means in recent years sometimes spending up to £15-17k/month; and not prioritising the mortgage pay down.

Solicitors are saying the CMS is likely to be in the order of £20-30k per year and I would likely have to provide my wife a monthly allowance based on needs assessment and current lifestyles. So looking at c £2.5k/month for CMS + £4-5k/month spousal which seems like an extortionate amount.

I mentioned 4-5 years support to wife and she reacted negatively saying there’s no way she could support herself in this time.

Havent gone to mediation yet but she’s very hostile and keeps accusing me of trying to pull a fast one on her whilst I think I’m being reasonable with my approach.

I have wealth from my family of origin which has never been co mingled with marital base (gifts and inheritance) and she’s implied that I should put that capital to paying down the mortgage on her behalf - which seems ludicrous to me.

I am keen to avoid court and legal dispute because of costs but increasingly looks like it may have to go down that route if she’s not reasonable. The overall package she’s asking would amount to c£50k per year x 5 years plus £200-300k mortgage so total of £450-500k ex CMS.

So comparing that to c £50-100k legal fees if goes to court..?

What is your income ?

I’d also be concerned by your ability to keep learning whatever you do now. Ai is here and many markets and white collar jobs will be fine in a few short years ..:: what if you hand over most of the assets then you lose your job.

Quit her job is a loaded statement and shows your distaste. I think you mean she has raised your children in order for you to progress at work, to her own detriment financially and likely emotionally.

No advice but hope your wife is okay.

Thanks @millymollymoomoo

£250k base salary + bonus that can go up to £450k per year between cash and deferred equity.

So take home after tax on cash based on salary only is c £138k.

bonus is entirely discretionary (some years could be nil and others up to the above amount); so I am apprehensive of committing large maintenance in years I don’t have the ability to pay.

If I include the bonus, it can add another 150k after tax, however will be a lower number for next 5 years as the deferred equity I have accrued deferred from my employer for past years of marriage will be split with my ex now anyway (about £30-40k per year) b

@Dishwater you miss the part where ops wife quit her job before having children….

Regardless, she’ll be ok. There’s lots of assets to share but she also needs to start becoming self sufficient .

London judges, according to anecdote, still seem to award spousal maintenance but rarely others in the rest of the country unless very high incomes involved.

She won’t get spousal, she needs to get a job. Go for a clean break don’t do a mesher order it’s just kicking the can down the road . Figure out an equitable settlement that enables her and the children to be set up in a new home. This may be more than 50% of the marital assets to account for her lack of income and career. I commend you for wanting a fair solution for your wife and kids but don’t sacrifice your financial future to appear the hero. Split the assets fairly, pay cms and your share of kids expenses that’s it don’t make it more complicated or entangled than it needs to be, there is plenty of money to go around.

It’s possible on these earnings spousal could be awarded. - but there’s enough assets to have a clean break. Op Ex should be expected to work ft too

What happens if she has a new partner and moves them into "your" house? What happens if you have a new partner who wants to buy a house? What happens if either of you has more kids? Or wants to marry again? Where do potential step kids from new partners fit in?
15 years is a long time to stay financially linked to someone you don't want to share a life with anymore.
Speak to a lawyer about family money. Unless its well locked up in trust, or in your parents accounts still, it could all be in play.

Thanks @NewbieSM,@millymollymoomoo and @Pleasealexa

Putting child maintenance aside, I don't see how we achieve a proper clean break without spousal maintenance unless she walks away on Day 1 with nearly 80% of the marital asset base:

Her argument will be that she needs a few years until she can get back into work and earning - which i agree with. She will argue that she needs £1m to purchase a 3-bed house in a similar area (close to schools) and will need £150-200k to cover living expenses for a few years until she can earn again.

That means £1.2m of equity out of the £1.5m marital assets (80%) with no spousal maintenance. OR ~£1m of equity (66%) and spousal maintenance for 4-5 years.

I'm obviously concerned for her and the kids' security and want to be doing the right thing without putting myself in financial difficulty. It's all sustainable if i keep the same wage in the near-term but clearly this sets me back a lot if things change.

The only way to reduce this would be to argue she needs to work immediately or to make significant change to lifestyle (move further out of town and downsize).

In my opinion a clean break is ALWAYS the best outcome. I know you want the house as an asset for your kids, but what if she repartners and he has kids/they have kids together? 15 years is a long time for complications to arise.

I agree. Keeping an interest in the home is a recipe for disaster. I can't tell if its concern for the kids or wanting to retain an asset and avoid stamp duty that's motivating you. I'm hoping it's not wanting to keep control over your ex wife.

I suspect a judge wouldn’t look too favourably at a long spousal maintenance period. Your proposal of 4-5 years sounds more than fair. I’ve had two friends in recent years with young children and high earning spouses who were granted 3 years tapered spousal maintenance.

She can downsize house to not need a mortgage . Eg 800k not 1m

she doesn’t need 150-200k for next couple years living expenses ! She can work, claim uc and will be receiving high cms per month ( more than most people’s income I expect !)

what if you get no bonus? Or just a small bonus? Your income on 135k will be circa 6.5k a month and you’ll be paying out what ,4K plus a month in cms and spousal. What if you’re made redundant ?

shes expecting too much imo. When you divorce living standards take a dink. So she needs to downsize, get back to work and not expect you to hand over everything,

@napody and @TealSapphire thank you and I worry about maintaining the house being a recipe for disaster. To clarify: I prefer a clean break and my ex is asking to maintain the house. Not me.

The only way I can rationalize it is possibly that i could pass on my 50% of the equity to the kids in the future. Believe me, i would rather a clean financial break and start fresh.

@Aguinnessplease 2-3 years is a good reference point and will check it with solicitor.

@millymollymoomoo spot on. Thank you.

As a general comment, I'm surprised that solicitors aren't guiding me on the financial aspect of the divorce but just addressing on legal matters and what the court likes or doesn't... Guess that's to be expected given they're lawyers.

Thank you all for the sound advice!

Your lawyers absolutely should be guiding you on finances and trying to get you the best deal
possible. If they are not, change solicitors

When you say you have wealth not included in the marriage what exactly do you mean? If you mean it is protected by a trust then fair enough but if it is in your name it will be included as a marital asset.

Aim for a clean break. I have just gone through this in NI. As an I dictation to our similar stories.....We couldn't afford childcare and I had to step back from my career to care for our children. I couldn't afford not to work either so became self employed with a modest wage guaranteeing that we had no childcare costs. All my earnings went back into the family/home, couldn't afford to pay into a pension. Should have prioritised it, but the family home and husband's pension were to fund our retirement. He pursued and advanced in his career and like your wife, my focus which we agreed upon, was the family and home.

Fast forward, divorce on the cards. As the more vulnerable in the partnership I was afraid of the change for myself and the children both emotionally and financially. But long story short, the similarities here would make me believe you could come to a similar arrangement.

Agree the family home is to be sold, mortgage cleared and split at a rate of usually 70/30 or 65/35 after conveyancing fees. You both pay your legal bills from your equity share.
You can then trade off some of your equity for a spousal maintenance lump sum.this happened in my case. You may trade off more in lieu of other assets you have. This would allow your wife to maximise her cash deposit for the purchase of a new house.
Your pension then would be open to being shared at anything from a starting point of 50/50 and can be transferred into a pension of your wife's choice.

Then contact child maintenance service and find out what rate you are expected to pay. You can then determine if you would like to and are in a position to pay more. Agree with your wife in principal things like how school trips payment will be shared between you. Driving lessons, tuition, school uniforms etc etc etc

You are correct that a clean break would be best. Ideally where some dignity can be shown on both sides for the sake of the children and the past that you shared, the future you had hoped for and the future ahead where you will still be tethered to one another as a consequence of having children together. I am not going to say this will be easy or will happen. I wish it were the case for me but divorce can bring out a really destructive and petty side in people.

Don't be taken advantage of. You need to be able to afford a home too where your children can stay with you. Your wife and kids will have to downsize or relocate to somewhere that homes are cheaper but the standard of living might be retained. That will be her choice.

Your wife might not be able to get a mortgage. I wasn't able to 1. because of being self employed with 2.the income that I had. a relative took out a joint borrower sole owner mortgage with me. She's liable if I default but I am able to cover my mortgage. Your wife might need a relative to step up for her here

You sound like a decent person from what you have written so irrespective of how your marriage has reached where it is

1. Your wife will be afraid
2. She needs time to build up financial and emotional security.

If you continue to be considerate but with the guidance of a solicitor you would be best opting for a clean break, selling the house, splitting it appropriately, pay a spousal maintenance lump sum (she won't be taxed on it if it's a lump sum given at sale of house), agree a split of pension and other assets or trade off by giving her all of certain. Pensions to that she relinquishes all right to further monies.

You can review child maintenance annually as your wages increase. You can start with the minimum recommended and then create a private arrangement,document what additional you're willing to pay for.

I would say definitely get a good solicitor that comes recommended. You can instruct them to be gentle or to be pushy with the opposing legal team. It might be difficult to be kind and dignified when negotiating these next stages but you love your kids so it's important to treat their mother well. It doesn't mean giving in to all her demands, it's just means being fair.

Best of luck

“I have wealth from my family of origin which has never been co mingled with marital base (gifts and inheritance)” - it got co mingled when you got married, that’s what marriage is, really. (I mean, it’s more than that, at best, obviously! But legally, you’re combining all your assets.

Your wife sounds very greedy, she can downsize and get a job like most people have to. Get a good solicitor and don't let her walk over you, you will need to be able to get a decent home as well to have your children.