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No idea what is fair/correct advice/where to go with settlement

Posted by Newstart 
No idea what is fair/correct advice/where to go with settlement
December 05, 2021 06:49PM
What an informative and interesting site - thank you and well done! Learned so much from reading so much on here.

We are at the point of financial settlement through mediation and I have no idea what is fair. I am self-representing but have spoken to a solicitor x 2 both of whom gave different opinions/advice so am none the wiser. It would be really helpful to gain some thoughts and advice please.

Ages W: 47 H: 53
No savings.
Cars - equal
Debts - £5K wife
Equity - £250K
Business - £2K husband
Married 7 years, cohabited 18 months before
Children - 2 children of the family (wife's) + 2 not children of the family (age 20 & 23 husband's)
Income - husband £12K (COVID impact) Previous year's a/c £20K previous works part-time (own choice, no childcare). Wife £35K gross (works full-time)
Pensions - £73K wife (£45K pre-marriage), £341K husband (all pre-marriage)
Mortgage capacity: W:£95K H: £0

I've had conflicting advice on whether this is a short marriage or not.
Likewise, conflicting that this is not a needs case. Equity does not provide for a three-bed and one-bed property so unsure why this wouldn't be a needs case.

My understanding was that everything is chucked into the pot and starting point is 50/50 for settlement.

Mediator said during previous session that husband was entitled to ring-fence all his pension due to it being pre-marital. If this is the case, can I suggest ring-fencing the £66K equity from my own pre-marital bought property (invested into first martial home) and potentially the £120K of my inheritance I have invested into the current marital home? I haven't contributed to a pension during the marriage as we needed the income more - this have any bearing at all?

I also thought the PAG report would now have some bearing/weight in the fact that is advises ring fencing pensions when a needs case is not appropriate (and likewise that pension offsetting is not always the best option).

Have I completely gone wrong somewhere in my understanding given that the mediator says the pre-marital pensions should be left alone?

My husband also put on his form E he needs a 2-bed house in case one of his adult children come and stay. He works round the country so is not driven by location for work. When I questioned him needing £200K for a 2-bed, he said it was because he wanted to live near the cricket club for his social life. Mediator says this is fine.

Direction most welcome!
Re: No idea what is fair/correct advice/where to go with settlement
December 06, 2021 10:44AM
1. How old are the two younger children and is your husband the father or did you bring them to the marriage?

2. Is the matrimonial home in joint names?
Re: No idea what is fair/correct advice/where to go with settlement
December 06, 2021 07:21PM
Thanks for replying.
1. They are both 14 just gone. Twins. Not his children but he says children of the family.
2. Yes.

I've had a WOP offer today. 60/40 equity only. Both retain own pensions I.e. no sharing - wants to ring fence his as pre marriage.
Re: No idea what is fair/correct advice/where to go with settlement
December 07, 2021 10:23AM
OK, well, this is a needs case because of the ages of the dependent children and because there is not enough capital to provide fairly for both of you if divided equally.

I am sorry to say that your financial contributions to the matrimonial home cannot be ring fenced in the same way as pensions. That is because it is the matrimonial home and it is in joint names.

You do earn more than your husband (and therefore have a higher mortgage capacity also because you are younger) and some of your pension was built up during the marriage so it is a matrimonial asset in a way that pre-acquired pensions might not be.

Taking these things into account your husband's proposal is not off the wall and probably within the range of possible outcomes that might be reasonable.

Having said that, this is a negotiation and the outcome of negotiation does not depend on figures alone. There are often other factors at play. For instance, one spouse may in a greater hurry to settle than the other for all sorts of reasons. So you can certainly go back with a counterproposal which makes something of your greater financial contribution to the matrimonial home and the relatively big disparity in pension provision.
Re: No idea what is fair/correct advice/where to go with settlement
December 07, 2021 12:55PM
David, thank you.

I have made a counter offer based on the needs case and priority in housing the children. I have been unable to contribute into a pension fund throughout the marriage as the income was needed more due to husband's choice of working part-time and lack of financial contribution to the family income. I of course feel that I have been penalised by sacrificing this contribution but I would think that. I feel it may be a case to put forward in the negotiations.

I will endeavour to lean on my contributions as breadwinner and homemaker throughout should further negotiation take place.

Reading many of the messages on this forum, it is a source of not only sound advice but wisdom and expertise and I too, like so many of the others and extremely grateful.
Re: No idea what is fair/correct advice/where to go with settlement
December 07, 2021 04:13PM
>>I will endeavour to lean on my contributions as breadwinner and homemaker throughout should further negotiation take place.

Personally I would be more inclined to emphasise (a) your greater financial contribution to the matrimonial home, (b) the big difference in pension provision and (c) that you have two dependent children you need to house and take care of.

The reason I would emphasise these rather than the ones you have mentioned is that courts tend to take the view that different spouses contribute in different ways which tends to lessen the impact of the factors you have mentioned.

It is also, for the purposes of negotiation, worth pointing out that there is no rule of law which ring fences pre-acquired pensions. Need also plays into how pensions are divided (although it is fair to say that because of your age, greater income and the medium length of the marriage there is certainly a good argument here for excluding pre-acquired pensions).
Re: No idea what is fair/correct advice/where to go with settlement
December 07, 2021 05:58PM
Yes, I've dabbled in reading about the PAG report. Despite the sadness of divorce and the situation, it is very interesting at least!

Thank you once again for your pointers. It is hard to decipher what is fair and what isn't and certainly what a judge would deem so whether that be in court or signing a consent order.

I shall await a response to my counter offer and take it from there.
Re: No idea what is fair/correct advice/where to go with settlement
December 11, 2021 12:47PM
David, mediation didn't go well.
He won't be flexible at all in his offer. He also insisted he needs a two bed property in case either of his adult non dependant sons want to stay and for him working purposes. £200k. Yet I am not afforded a spare room for exactly the same reasons (I work from home) and the three bed I need he estimates to be the same cost to 250k and not willing the split any extra for stamp duty, moving costs etc.

Anyway, my reason for writing again is to seek your thoughts on the fact that in April 2023 when he reaches 55, he will have the option of drawing down 25% tax free lump sum from his final salary pension circa £85k. Is this not a contributing factor in the settlement?

With thanks in anticipation.
Re: No idea what is fair/correct advice/where to go with settlement
December 11, 2021 04:29PM
>>Anyway, my reason for writing again is to seek your thoughts on the fact that in April 2023 when he reaches 55, he will have the option of drawing down 25% tax free lump sum from his final salary pension circa £85k. Is this not a contributing factor in the settlement? <<

No. No-one in their right senses would do that. (1) It would result in a huge tax liability and (2) it would drastically reduce the value of his pension for years into the future. People only do this if they really have no choice such as becoming disabled.
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