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Divorce

Posted by Newcastle89 
Divorce
September 25, 2022 05:28PM
Hi, please can you advise on what would seem a fair split in the following scenario:

Married for 14 years
wife = 41 earning £17k p/t 3 days a week pension of £85k
husband = 44 earning £60k (plus bonus around £7k) pension of £400k
2 children - boy 11, girl 6
house equity £400k

Childcare split - 60 wife: 40 husband

Thank you



Edited 1 time(s). Last edit at 09/26/2022 09:24AM by Newcastle89.
Re: Divorce
September 26, 2022 10:11AM
Well, these are very skeletal facts and much might actually depend upon the detail. However, based on these facts and with the caveat that the details may affect the answer significantly the rough answer is:-

1. You have a pension worth £400k and your wife has a pension worth £85k so total pension assets are £485K. Half of £485K is £242,500. Therefore to equalise pensions requires a transfer of £242,500 less £85K ie £157,500 of your pension or 39.37% to your wife. This is a VERY rough calculation. The percentage required to achieve equality of pension income may be different. However a transfer of this sort of order is likely.

2. Assuming the children live with your wife you will be paying approximately 20% of your income to her in child maintenance which would give her an income of £17K plus £13.4K (plus child benefit etc) and leave you with an income of £53.6K. Assuming your wife could work more than 3 days a week it should be possible to have a clean break - ie no spousal maintenance.

3. The answer which does require more detail is what happens to the house. This depends upon what the cost of reasonable alternative accommodation would cost for your wife and children. Bearing in mind that your wife has a lower mortgage capacity it is very likely that this equity will have to be split unequally in your wife's favour. Bearing in mind that spousal maintenance can work out very expensive indeed it is in any event in your interest to trade more of the equity i your wife's favour in return for a clean break.
Re: Divorce
September 26, 2022 10:32AM
Thank you for your reply.

My wife could work more hours during the school day, however it doesn’t affect the end result much as this then reduces universal credit which I believe she will be eligible for on her current salary.

I would really like to investigate the possibility of letting her and the children stay in the house as buying similar would be in the region of £550-600k which I’m not sure Would worth it. She wouldn’t be able to pay the total current mortgage per month though, what could our options be here? She has said she is keen to do some training and to change her career to be as well as working more hours as the children grow older, however this is obviously not a guarantee
Re: Divorce
September 26, 2022 02:28PM
If the solution ends up so that your wife remains in the former matrimonial home with the children then that is likely to be an outcome with disadvantageous consequences for you. If that is the outcome then the way that would normally be achieved would be that the house was transferred into your wife's sole name, she would promise to use her best efforts to get you removed from the mortgage and you would get a charge on the property for a percentage of its value. That charge would not be capable of being enforced until one of various trigger events occurred which are normally (a) when the last child ceases to be dependent or (b) the death of your wife.

Despite promising to use her best efforts to get you removed from the mortgage your wife will not be able to do so because (a) her income is too low and (b) nothing can compel the mortgage lender to remove you and so the lender will prefer to keep you on the mortgage as extra security. This means you would find it difficult/impossible to raise a mortgage of your own so you will probably have to rent accommodation for yourself until such time as the house can eventually be sold. Bearing in mind the younger child is aged 6 you are likely to be looking at 12 or 15 years in rented accommodation.

Although your wish for your wife to stay in the house with the children does you credit it is you who will be bearing the consequences of that decision for the next 15 years or so.

If your wife cannot pay all the outgoings on the house from her own income and the child maintenance you will be paying then you will also very likely need to pay her spousal periodical payments to make up the difference.
Re: Divorce
November 22, 2022 12:03PM
Thank you David for the information this is very useful. Please could you let me know what you think would be a suitable financial split - would 60/40 in my ex’s favour be a fair offer or more 70/30? I believe a sale of the property is now the only way forward
Re: Divorce
November 22, 2022 05:48PM
If the house is to be sold now then you have to consider where your wife and children will live, how much it will cost and what her mortgage capacity is. Those are the factors which will determine what percentage of the equity she needs to receive.

Even if she needs to receive ALL the equity that is not necessarily a disaster for you and would have advantages (provided the house is sold).

1. You would be released from the mortgage and thereby get one of your own.

2. You could trade her getting all the equity for (a) a clean break between you and her (ie only child maintenance, not any spousal maintenance) and (b) her getting less (none?) of your pension.

3. You are of an age from which you could then rebuild your financial position.

On the figures it seems to me there is scope for flexibility in negotiations.
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