Does this sound reasonable ... seperation agreement??

[annandcait]

Any opinions would be much appreciated.

My husband walked left our 12 year relationship (the family home and our 4 children) last November. I also found out a week after he left that I was pregnant again.

We have been discussing financial arrangements and have come up with a couple of ideas - although we don't know if it is 100% 'right' we think it seems the fairest way.

Our house is worth about £300k and our mortage is abt £157k. Leaving equity of about £143k (so, just over £70 each).

My husband has agreed to accept 20% of the value of hte house (as it currently stands it would mean about £60k to him). I have made it clear that I would not look to repay him until the youngest is 18 (or soon only if I can afford it). He is very happy with this.

By us working on a percentage basis ... it means that if the house prices have crashed to nothing when I come to sell ... his 20% will be worth less .. and vice versa; meaning that I don;t lose everything to him if the prices should be low when I do come to sell.

I don;t know how the splitting of a property is 'usually' done - but this seems quite fair to me.

Is it?? If anyone has any comments .. I'd be very pleased to hear them.

He will pay me £115 per week in maintenance to raise his 5 children ... not at all enough ... but then it is just a fraction over a third of his wages ... so, again, I think it is fair.

Thanks for reading

a separation agreement is NOT legally binding but if you both have legal advice on it before its drawn up then the court will take it into account but do not have to go along with it. Financial matters are looked at as a whole and that will include any pensions either of you have. Are there any debts either of you are going to be responsible for? these need to be taken into account also, as well as any savings and other assets. Another thing taken into account is wage differences and ability to earn. Usually it is agreed, in delaying payment, that one person would pay the other (When children are involved) when youngest child reaches 18, finishes full time education (usually includes uni unless stated), when the person staying in the house marries or cohabits for six months or when that person dies. You also need to consider that if you work from the figure of 20% is this 20%of the equity in the property as obviously as the years go by and if house prices stay the same then there will be more equity in the house. or is it 20T% of the house value. Usually courts work on a 60/40 share or 70/30 share when children are involved of the equity in the property. Are you intending on transferring the property into your sole name and can you get a mortgage to buy him out now?

Nothing will be finalised until you divorce and enter into a Consent Order/ Order of the court so in six months time he could ask for more!

Maintenance seems to be about right for the children but again.

Hi DLI, thanks so much for your reply.

The 20% is the percentage of the value of the house (not the equity). This is based on his having 60k equity in the house (which is worth abt 300k) in todays market.

Yes - I would be looking to transfer the mortgage into my sole name ... though that is something i've not yet ventured into so I'm not sure if it is do-able or how to go about it yet.

Yes - I'm reading that 60/40 and 70/30 is more commonplace. I am just looking for a fair solution for both parties.

We are hoping to do a DIY divorce ... hence we have not had any real legal advice ot date ... and for hte most part are wroking from case studies to provide us with info.

you can deal with the divorce quite easily yourself but i would say see a solicitor with regards to finances.

I agree with a lot of what DLI has said with regards to the separation agreement not being 100% watertight or legally binding and that the only way to achieve a full and final settlement which means that neither of you can make any further claims is with a Consent Order which can only be lodged at the Court once Decree Nisi (the first of two decrees) is pronounced.

I am struggling to see how the 20% is fair (to you) on your figures that 20% works out at around 60k now, however looking at the current equity, 50% is only 70k so in real terms you are giving him far more than 20% (haven't got a calculator to hand but surely this must work out at nearer 45%? - I'm sure a maths whizz will be along shortly to clarify that)

Bearing in mind that it appears that you will be paying the mortgage yourself from now on, this cannot be fair and reasonable.

With regards to the proposed level of maintenance, this appears about right as the old CSA guidelines were 25% of his net income (gross less tax, NI and pension contributions) for 3 or more children (sadly its the same for 3 or 5)

However, as DLI said, you need to consider any other matrimonial assets, ie savings, pensions (which can sometimes be a significant asset) and also debts. No one can possibly advise whether any financial agreement is fair and reasonable without having all the figures available.

With regards to the divorce itself, it is relatively easy for parties to act in person for a straightforward uncontested divorce. However, you would be strongly advised to instruct Solicitors with regards to the finances, in particular the drafting of the Consent Order if you are able to reach an agreement. It would be virtually impossible for a layperson to prepare one which would include all the required details to make it legally binding and be ratified (approved) by the Court.

Thanks for your replies ... I agree - the figures seem a bit confusing. Basically, he agrees to the 30% of equity (being, it would seem, quite commonplace for the primary caregiver and payer of the mortgage to take 70%). He has suggested taking 40k as it stands now (which is just under 30% of equity) which I think is very fair and reasonable.
I can see the argument for the pension ... but as he has worked so hard in our time together and been the main breadwinner - i would just be looking ot be main beneficiary of his pension until such times as the children are independant - i.e. 18yrs (so this would cover me in the event of his death). Thereafter, I am happy to let him keep his pension into retirement and I will attempt to make my own provisions for myself. Does that sound reasonable ...?

Does anyone have any idea of the cost involved of getting the consent order drawn up by a solicitor? My husband and I are both keen to keep costs to a minimum and although I should ge legal aid ... i'm not sure if this would only kick in if he should instigate some sort of legal proceedings against me (which I would like to think would not occur). Also - he gets no legal aid as he works full time.

Hi annandcait. Sorry you are going through all this. I can only say what happened in my case, some of which might be helpful.
I went to see a solicitor for a free initial session. This was really helpful. He gave me loads of advice and some good guidance as to what I should do. It was detailed and took about an hour and I would advise anyone to take the chance of some free legal advice if available. I think lots of solicitors do this so it would be worth ringing some to see.
I would think very carefully before giving up your rights to his pension. Even though he has been the main breadwinner, you were a partnership and both contributed even if you did not earn as much. If you have stopped work or worked part time to look after the children you have made sacrifices which should be acknowledged.
In my case the equity in the family house was virtually the same as the value of my XH's pension. So I kept the house, and he kept his pension. This caused less disruption to the children as we did not have to move. He then knows that I will not be asking for any of his pension in the future as it is all his. This made for a very clean break.
He pays 25% of his net income in maintainence. I rarely ask him for any extras. Only big school trips or help with a maths tutor etc..
We did do the whole thing with a solicitor. My XH was asked to cover the cost as the split was entirely his doing (4 year affair, lies deceit etc...). The total cost was about £3500 but I'm not sure how much of that was the consent order.
To be honest I would seek some legal advice and then decide how much of this you want to handle yourself. It is all very stressful and even the most amicable splits can get a bit heated once money is involved.
I hope this helps.
GW

Hi GW ... and thank you for sharing your experiences and for your suggestions.

Okay - I can see that the pension issue needs to be looked at some more.

I am concerned that in order to remove my husbands name from the mortgage it would seem I have to 're-mortgage' which is not an option given that I am unable to work (4 children and expecting no.5). If his name is not removed from the mortgage I understand that it will be nigh on impossible for him to get a mortgage himself ... which is not a prospect he is very happy about (understandably).

I don't have the money to buy him out and I can;t take on the mortgage ... so it's not a great situation for him. I appreciate he probably cannot force a sale of the property since a judge would deem that the house should be kept in the interests of me being able ot raise our 5 children there.

I will see what free advice I can get and hopefully my husband will do the same so that we can get as much info as possible under our belts!

Yes I can see it's pretty difficult and I admire you for thinking of your XHs situation too. I know I didn't have a lot of sympathy for my xh given what he was putting us all through! Initially he didn't think his pension would be important but as soon as solicitors explained the financial settlement he realised it was fair. He was probably feeling a bit guilty too which may have helped!

You may not need to remortgage if you stay with the same lender and simply both write to request the name is changed to yours alone, however I think that depends on the mortgage lender.

At the same time as the consent order etc I arranged to change the deeds to just my name. The mortgage stayed in joint names for a while longer. I wouldn't take his name off the mortgage until you have a financial agreement in place. I know he needs to find a place of his own but his main concern should be to provide for his 5 children and also you as their mother. My xh managed to get another mortgage at the same time by the way so it must be possible. I think that depends on which lender also!

I think he should be providing you with some maintainence too as you are at home full time with the children. I know this seems to be expecting more and more of him but it is so worth getting a good financial settlement now. It will be hard to ask for more money in a few years time.

A wise friend said to me at the time "The children will be fine if you are fine, so look after yourself".

Sorry if this is long and waffly.
Let us know how you get on with legal advice etc..
GW