Parents Splitting

[roland83]

Hi, hope you can help.

I'm 31, so this isn't a major issue in my life, but my Dad and his Wife are separating after 15 years together and 5 years married.

My dad keeps asking me lots of questions and I'm wondering if anyone knows what to tell him and I'm not sure having never been married.

Okay some facts;

House with £140,000 equity.
Secured loan of £24,000.

He put £25,000 down when buying the house and pays for all bills, she pays for food and some furniture items.

He is getting the house repossessed by the end of the month by the secured loan company, and is going to a hearing next week to get it postponed until the house sells.

In all this, they have decided to separate, not sure the exact reasons why, but Dad has also decided to come clean to the Tax and NI office about him not paying anything. A solicitor has said they can only go back 7 years, and with the recession he hasn't been earning much, so doesn't think it'll be too bad.

He says he wants to stress about worrying over it to be gone.

His wife wants half the equity of the house, not bothered about divorce, just wants her money and to go.

House is in his name only.

He wants to pay the secured loan, and tax money/fines etc before she gets any money from the house sale.

I have no idea what to tell him, apart from to see a solicitor, but he's not listening, and I have no idea what's true as he a bit of a liar at times, stretches the truth.

I like my step-mum, but not much of a relationship as I don't live locally anymore, but I also want to make sure my dad isn't left with nothing as he's worked hard all his life and I'm worried for him.

I'm also self-employed and pay my tax and NI, so I'm annoyed he's done this, but that aside, what is she legally entitled to?

Thanks, sorry for the long message, didn't know how to get it all down.

He really does need to see a solicitor but usually the convention is that both parties are entitled to an equal share of any assets acquired during the marriage. By contrast personal loans remain personal. In the case of a house purchased prior to the marriage, the convention is slightly different and depends a lot on when they original purchase took place, how much was originally invested (rather than ongoing bills or mortgage payments) and how long they have been married. i.e. if someone brings a house to a marriage and then divorces after a year the other party has less of a claim than if they divorce after 20 years.

If he won't see a solicitor then your stepmother certainly should. 15 years together and 5 years married is significant and the aim is a fair settlement. It is immaterial that she has not paid towards the mortgage.

usually the convention is that both parties are entitled to an equal share of any assets acquired during the marriage

Actually it is that both parties are entitled to a fair share. The starting point is an equal split but there are all kinds of factors that can push it one way or the other (which is actually what Cogito said in her full post so apologies for being pedantic). For example, if his earnings are likely to be significantly higher than hers she may be entitled to a higher proportion.

I agree with Cogito that above all else he needs to see a solicitor and give them the full facts. They will be able to advise what his wife is likely to be entitled to. Anyone on MN who puts a figure on it will be guessing.

I would suspect that HM Tax inspectors will get their share of any money due first then what remains is shared out, perhaps post on legal about this.

Personal debts - and tax would qualify as personal - are deducted from an individual's share of the assets, not the joint assets. If I read it correctly neither the tax debt nor the £24k secured loan belong to the step-mother

Thanks for the replies.

I really hope it's a fair settlement for both of them, I don't want to see either of them suffer and I dare say my step-mum has had to put up with a lot from my dad for all these years. Saying that, I really thought they were happy, and doesn't seem to be an affair from either side, so I'm not sure what's happening.

My dad bought the house when they had been together a year I think, but they didn't marry until 5 years ago, together 15 years. Dad paid £25k deposit from the sale of my mum and dads house and divorce.

He wants the secured loan to be taken from the equity, then the tax money, then his £25,000 deposit, then split the rest. I've no idea if that's realistic or not..

I'm also worried he may even face prison for tax avoidance, they can only claim for the last 7yrs, but he's been a builder for around 30 years!

He's the type of person that will leave it all until the last minute, bury his head in the sand and lose a lot of money. I really wish he would see a solicitor but I think he's really struggling for money.

I never realised how stressful my mum and dad would become and I got older, I'm struggling with knowing what to say and how to cope with the worry myself. My mum has only just stopped stressing me out about moving abroad, which she now regrets.. feel like burying my head in the sand is a good option right now.

Tax debt and secured loan are my dads, but the house is in his name only, not sure if that has any bearing on the outcome?

He says that as she knew he wasn't paying tax then she is liable too, but I don't think it works like that.

That's probably not realistic. Out of £140k equity, let's say he gets back his original £25k down-payment and they split the rest. That leaves him a £58k lump sum with which to pay off the taxman and the secured loan (assuming it's in his sole name rather than joint names)

He says that as she knew he wasn't paying tax then she is liable too, but I don't think it works like that.

I think your dad is believing what he wants to believe rather than what is correct and I tend to agree with what Cogito has already said. The debt is his, the house belongs to both of them. He may have a very nasty shock coming and I hope your step mum gets some good professional advice.

I'm sure it's in his sole name, I doubt my step-mum even knew about it.. he struggled in the recession and used it for cash flow I guess.

The house has a repossession warrant on it, he's going to a hearing next week to postpone it, pending the sale of the house. He's been told they will most likely agree as there is so much equity in the house. I checked online and it is up for sale.

Therefore, the loan will be taken off the house sale money.

My step-mum has also said she doesn't want to divorce, just to get her share of the money, which seems odd to me?

My dad also said that if he dies, me and my sister will get his share as he made a will years ago. I said that surely the marriage will override the will he made, but he's sure it won't. Part of me thinks that this is why she doesn't want to divorce, as it happened when her ex-husband died, she got money even though they hated each other.

Saying all that, I don't think there will be any money left anyhow!

I think my step mum has had enough of him, I don't blame her, my mum left for the same reasons.. he's a nice man, a very hard worker, but he lies.. and about stupid things too.

There's only so much crap you can take, and I'd like to hear her side of the story but I don't feel it's my place to contact her, and it feels disloyal to my dad.

He's an idiot really.. even if he has 20k left over I think he'd be happy.

If your stepmother doesn't get her divorce underway before the house is sold then the loan will get paid off, the marital assets will drop and she'll only get a share of what's left. Marriage would normally put someone in the top slot for an inheritance but if he has made a will specifically leaving out his wife and in favour of his DCs that is what would happen. It would certainly explain why she'd rather take her cut and go now.

Ah okay, thanks Cogito, that's making more sense now then.

She says she isn't interested in a divorce, but maybe once she gets legal advice she will be.

Your dad's marriage will make the will invalid, so he needs a new one.

Yes, I missed the part about the will being from a long time ago.

I thought that, but he thinks otherwise, and trying to convince him he isn't the all knowing almighty is a task in itself.

I will wait until the house is sold and things have settled down and then speak with him again about a new will, as I presume they won't be getting divorced.

I do very much appreciate all the help, I know it's not the same as a solicitor, but it's made me feel a bit better at least.

The debts are not necessarily his even if they are in his sole name. As they are married the debts may be debts of the marriage. If the debt is in his name that means he would still be liable to pay but he may get a higher proportion of the assets to allow him to do so. On the other hand he may not get back the full £25,000 he contributed towards the house. Indeed, if there isn't enough money to meet his and his wife's reasonable needs he may not get any of it back.