Help! Agreeing an Asset Split for our Divorce!!

[1985Livinginthe80s]

Hi All

Advice please on asset split – my husband and I are planning to divorce, we are amicable – we have two children aged 17 and 13. We have been together 35 years, married for 20 years. Looking to go through mediation to then create a consent order for the finances. Girls are living with me full time - see their Dad on agreed days but don't stay over with him.

We own one property jointly which is currently let out with rental income of £975. No mortgage, valued at £260k. 2 bed terraced property. Purchased by us before we got married.

The marital family home is in husbands name, valued at £410k, mortgage remaining of £118K, 12 years remaining. 3 bed detached property. Husband pays mortgage and the bills for this property with some of the rental income supporting this.

My husbands dad (my father in law) gave us money to help with the deposit on the marital property as a lifetime loan against his house (his house valued at over 1 million) and that lifetime loan is currently at £180k. The idea being that when the FIL's property passes to my husband on death we as a family move in and take his house on and sell the rental to cover paying off the lifetime loan. The marital home would then become a rental property and part of the pension pot for us both. Obviously that won't be happening now!

I have a pension of £75k my husband is in the armed forces and has a full military pension having served 22 years - I don't know what his pension is worth.

He earns £50k a year I earn £32k a year - I had 10 years of not working/working part time whilst I brought the children up.

Myself and the girls are currently living in the marital home and my husband is living with his Dad. We've been separated a year and a half.

I'd love us to stay in the house we are living in at the moment but I won't be able to afford the mortgage on my own with my earnings and my husband wants us to sell one of the houses so we can clear this lifetime loan. I could move into the rental property as that is affordable but it is one double and one single room and may not be big enough for me and the girls.

I need to know where I stand legally before I can agree to any order, my husband is also rushing me to get the order sorted ASAP so we can divorce and he can move on and I want to be sure that what I agree to is fair for my children - any advice very very welcome!!

Honestly this is quite complication because of the lifetime loan and pensions. It's worth shelling out a bit to see a solicitor to advise you properly.

You don't say how old you are but if you've been together 35 years you'll be closer to retirement than many so the pension is something that needs carefully looking into as your currently cetv isn't high.

I don't think anyone here could tell you what's fair except in very general terms. I'd be looking at more than 50 percent equity to account for the years you didn't work and the pension and some form of pension sharing order.

Sorry to not be more help

Thank you - I am 51. I am worried about the cost of solicitors as I have no savings - if anyone has been through similar, are there other avenues for legal advice? We are thinking of using 'Amicable' for the divorce/consent order etc - I will research and contact them as maybe then can give me some initial advice?

If things are amicable you absolutely don't need a solicitor to do the consent order and the court side. But a few hundred quid for an hour or two to give you a general idea of what you could expect would help you.

As a starting point you need to work out what the assets are. From your post there's 260k from the rental house then 410k minus 118 mortgage minus 180 loan so 112k in the marital home?

That gives you 372k. Of which half would be 186k.

Are there any savings he has?

You need to know his pension cetv so that can be included in the pot. The idea is to equalise pension contributions in the course of the marriage and a pound of cetv is not the same as a pound in the bank.

What is housing like in your area? For example if you sold the rental house could you buy somewhere that meets your needs?

Could you afford to stay in the martial home with child maintenance which i presume would be quite high if he has no overnights?

Totally understand not wanting solicitors involved in the process itself but could be very valuable to understand what you are asking for.

Has ex made any offers?

I would agree with the PP that you need to get legal advice. I would, however, get a solicitor to write the consent order to ensure that it is watertight and meets what you've agreed. Given that you have properties worth over £500k involved, not paying for legal advice would be a false saving in my view.

You need to know how much his Forces pension is worth. There's info here: https://www.moneyhelper.org.uk/en/blog/retirement/guide-to-armed-forces-pensions It could be quite valuable. Do not make any decisions until you have a valuation. It is extremely important that you get legal advice. You might think that he is being amicable, but he is probably trying to keep you sweet so you don't ask too many questions. I'd lay money on him turning once you push for a pension valuation.

Thank you unsync. That is very useful. I have just utilised the link, and it looks like his pension will be a £50k lump sum when he leaves (which is at the end of the year) and then approx £15k per annum. I suspect this may also be a reason he is pushing to get things finalised ASAP so that he can keep his lump sum payment out of the asset calculations.

Well he can’t keep his lump sum out of the pot. It goes in along with your pension, equity and any savings.

Is the 17 year old looking at going to university? If so you need to reach an agreement on when child support will end.

Also if he is likely to inherit his dad’s 1m property that should be part of the consideration don’t underestimate your stake in that. Seems like you will be very well off but you need to fight for your entitlements and don’t skimp on solicitor costs… assume you have no chance of saving this marriage

Our 17 year old daughter is currently at college full time, she will be continuing her course for another 2 years from September 2025. So her support will end then but the other daughters will continue.

A £15k per year pension could be worth at least £300k (in addition to the £50k lump sum). It really needs to be properly valued and in the pot for consideration.

Given that you have two properties and need two properties (between you) it seems mad to sell one now to pay a loan that isn’t due. I’m not sure I have fully understood the lifetime loan thing but it sounds as though it is a gift (if not repaid until after death at which point your husband would inherit a much bigger asset anyway) that is packaged as a ‘loan’ in case you divorce. I’d want to run that past a lawyer too so I really do think you need legal advice because of that and the pension

The legal position is probably that you are both entitled to half minus the debts.

I work out
Property assets minus debts against them = 260 + 410 - 118 -180 = 368k.
OP & almostxH each get half so that is £184k each.

Pensions : the convention would probably mean he gives OP more equity to make up for his likely-much-larger pension pot. Supposing his pension CETV is 295k, combined total = 370k, he has to give OP about £110k or equivalent value asset to split evenly. Then OP could end up with about £295k ... I wonder if it's possible OP could get a mortgage of £115k to let her stay in current house.

Do you both truly have no other savings or assets, investment, ISAs, etc.?

I hope OP updates when she finds out what his pension CETV is.

Honestly. With all of that I’ve crunched a few numbers and considered your situation and the fairest and simplest thing seems to be you keep the family house with a small mortgage of 50k or so. He keeps remaining equity and his pension.
Children can stay home until they’re late 20s these days and he doesn’t seem to be planning to accommodate them.
What is he suggesting?

Please don't leave yourself short of pension. At 51 with a pot of 75k you'll need some aggressive saving to get even a modest income in retirement. Unless you are planning on selling the family home to downsize? I'd have thought it better to ask for a 50% share of pension and sell the family home, start afresh, now.

Hi All - thank you all so much for your advise so far - I have been given some details of family lawyers who offer first consultation free so I will follow those up as there are lots of scenarios regards the financial split I need to consider.

I have a poor credit rating which I am trying to rebuild from credit card debts when I was younger so it is very unlikely I will be able to get a mortgage.

If he’s doing this, your separation is not amicable - he’s trying to persuade you to take less than you are legally entitled to receive.

If your DH is in the forces and this has impacted your career either because of frequent moves or because you’ve effectively been a single parent at times due to him going overseas, this can be reflected in the settlement.

I absolutely agree with the posters who say you need legal advice - preferably from someone who has experience with military marriage splits.

The company Amicable.io is worth looking into, if you and your DH are on reasonably cordial speaking terms, because they are legally aware but their ethos is to help divorcing parties to reach a fair agreement, whereas the ethos of most lawyers is to represent one side and help that side to get the most money possible, even at the cost of having things turn adversarial.

You can't include a possible future inheritance as part of a divorce settlement. The OP can claim no ownership of her husband's dad's house. There's zero guarantee there would even be an inheritance. The only thing that should be considered is this lifetime loan, I think the OP really needs legal advice on this.

You both need to know the value of each pension. Without that you are working in the dark.

You must, must, must get legal advice. You say you can't afford it. I say you can't afford not to get it.
Forces pensions are among the best ones out there and they do not fit simply into the CETV bucket because of when they can be taken and how generous they are. You need to find someone with experience of splitting them properly, not just a standard local family lawyer with no knowledge of AFP. The Forces Pension Society is a good place to start. They can give you a starting place about what the different options mean - pension sharing, an attachment order or offsetting. But ultimately you need personalised advice tailored to your individual situation.

I could write an essay, but with that plus multiple properties and the loan to consider, it would be incredibly shortsighted not to get the advice.

Is there any documentation evidencing that the money from your FIL was a loan? If not, it is treated as a gift which is not a marital debt (i.e., not repayable).You could agree to repay it if you wish though.

From a brief glance at your information it looks as though both properties will need to be sold, divided either equally or slightly more to you if you need more to meet your needs (husband likely has a higher mortgage capacity), pension sharing order to equalise retirement incomes.

His pension will be a defined benefit pension, which is more difficult to value than a defined contribution pension and you would be well advised to consult a solicitor who can get a specialist to value his pension. The cash equivalent value of a DB pension is often around 2/3 of its fair actuarial value, meaning that negotiating on the basis of the CEV is likely to result in you getting less than your entitlement. Starting point is that you are entitled to half of it. Here is an article which discusses valuation of DB pensions: https://www.birketts.co.uk/legal-update/public-sector-pension-schemes-and-the-danger-for-divorcing-couples/

Actually realise that that article suggests the opposite of what I’ve said, though I’m not sure how recent the article is. Either way, DB pensions are more complex than DC ones and I think you should get specialist advice on this