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Expected Financial Split?

Posted by Miller 
Expected Financial Split?
August 30, 2023 03:10PM

My wife has filed for divorce after c16 years of marriage. I'm 46, she's 48. We have 2 kids (13 & 15) and intend to split childcare with me living locally post divorce. Our house is worth c£400k (with c£100k mortgage left). We have c£80k in disposable cash and a further c£300k tied up in pensions (mostly mine). I earn £70k pa gross but am on a 12 month fixed term contract. (I would argue that if not on that my reasonable annual salary would be £60k given available jobs in the area.) She's on c£40k with limited growth possible.

What is my chances of a 50:50 split of all assets with a clean break?

(Any advice appreciated)
Re: Expected Financial Split?
August 30, 2023 05:03PM
Secondary question. From looking through the other threads it looks like there is a separate split of:
- the pension assets
- the shared house/ cash reserves

Is that correct?

My concern was that she would get the house and I get my pension assets, leaving me with no real collateral to get a new home.
Re: Expected Financial Split?
August 30, 2023 05:35PM
It rather depends what your respective incomes are (or, to be more precise, your respective reasonable earning capacities).

Say A and B have similar housing needs. Say the cost of that housing would be £400K. Say the matrimonial capital to be divided is also £400K but A earns £10,000 per annum and B earns £100,000 per annum. In such circumstances A is likely to get more than half of the matrimonial capital because B has a much greater mortgage capacity than A.

Income or earning capacity also determines whether a clean break is practical. Courts prefer a clean break where possible and they are always obliged to consider it but sometimes it just isn't practical because of the figures - especially where there are children.

As to pensions well capital is one asset class like apples whereas a pension is a different asset like pears. Normally it is fairer to give three apples and three pears to each rather than six apples to one and six pears to the other. Having said that if, say, the figures result in A receiving most of the capital assets it could then well be considered fair for B to retain more of the pension in order to try and balance things out a bit. These things are not carved in stone. It very much depends on the figures and the details of individual circumstances.
Re: Expected Financial Split?
August 30, 2023 05:40PM
This should be very straightforward, seems a standard case. But no one can tell you what will happen as it depends on the specific judge. The law is too uncertain for anyone to tell. So your hard earned assets are in the hand of some judge. good luck!
Re: Expected Financial Split?
August 30, 2023 06:06PM
Actually, you cannot tell whether it is a 'standard case' because (a) you have presumably no experience of how any case has been decided in court let alone hundreds and (b) it is quite obvious that important relevant information is missing. There is no especial reason the poster should have known that but essential information is missing nevertheless.
Re: Expected Financial Split?
August 30, 2023 07:42PM
Both, thanks for your replies. Much appreciated.

David, can you clarify what relevant info I could share to help get a former idea of expectation. I appreciate even with the info this is just an informed opinion I’m looking for.
(To clarify my earning potential is c£60k pa and hers is c£40k)
Re: Expected Financial Split?
August 31, 2023 10:21AM
Well, the main missing information was the income. (Actually looking at your original post I see it was there so I am not sure why I missed that). Based on the income figures I see no reason why there should not be a clean break. Your wife clearly has a significant earning capacity so there is no obvious reason why there should not be a clean break.

Whether capital will be divided equally rather depends upon whether the existing property will be sold and what the price of suitable alternative accommodation would be for you both. If your wife were to remain in the former matrimonial home with the children that would be less than ideal from your point of view because you would not get half or any share of the equity any time soon. What would very likely happen in that event would be that you would retain a share in the property by way of a charge but you would not be able to realise your share by way of sale until the children ceased to be dependent. Your wife would also have to undertake to get you released from the mortgage which she may or may not be able to do. On the figures she probably could but you can't be sure because the lender doesn't really have much incentive to release you. If you couldn't be released from the mortgage that would inhibit you from being able to get a mortgage of your own. Therefore if the outcome is that your wife gets to stay in the house it should be absolutely non-negotiable from your point of view that it was conditional upon you actually being released from the mortgage (and not just your wife using her 'best endeavours' to get you released).

If the house was sold and the equity divided between you then whether it was divided equally would rather depend upon what the cost of suitable alternative accommodation was for each of you and how much of a mortgage you could each raise. You have rather a greater mortgage capacity than your wife so she might need more than half of the equity to buy somewhere suitable. Whether she does or not very much depends on the cost of that suitable alternative accommodation and how much she can raise by way of mortgage.
Re: Expected Financial Split?
August 31, 2023 11:20AM
Thanks David. That's a really comprehensive and useful reply. Really appreciated.
Re: Expected Financial Split?
November 13, 2023 09:51AM
Hi David,

It's actually c£250k of pension. All in defined contribution schemes. We've got letters with Cash Transfer values for each of them. She's now explained that her advice tells her we next need to get an actuary to value them, incurring £3-4k costs.

Surely that only applies to Defined benefit pensions. Is there anything I can go back with to reassure that her this is an unnecessary cost?
If not is this a cost we both wear or does it come out of her side of any settlement?

Re: Expected Financial Split?
November 13, 2023 12:40PM
Only you and your wife can decide whether it is necessary to use an actuary. The value of the pensions here is such that whether you use an actuary is hardly compulsory. If you don't then any division of pensions would be more rough and ready but many people can accept that trade off when the pensions have this sort of value.

If you do each decide to get an actuarial report it is customary to share the costs of that. It would not normally be paid just by one side since both benefit from the advice.
Re: Expected Financial Split?
December 19, 2023 08:35AM

Following on from this my wife has a solicitor paid through her workplace, we're at the stage of gathering our finances which is effectively me providing info as requested by her.

Should I also get a solicitor, if so at what stage do you suggest?

And who pays for it )not an option through my work)? We have a joint account and split all income/ costs through this account.

Re: Expected Financial Split?
December 19, 2023 04:48PM
You should get your own independent legal advice if and when any proposal to settle is forthcoming and BEFORE you agree anything. Obviously you can seek your own legal advice before then that that point is the Rubicon at which you should certainly do so. Since the advice will be for your benefit rather than for the benefit of your wife you will be expected to pay the cost of it. Unless, of course, your wife agrees to contribute but I would be astonished if she were to do that. It certainly wouldn't be normal.
Re: Expected Financial Split?
December 23, 2023 09:02AM
I would be very mindful, on my experience, that Solicitors drag cases out to benefit themselves and take a big chunk of available assets away from the pot, some 30% (£100k from a £370k pot) Ideally you should try and resolve between you and your ex partner, if no joy , then go to mediation.
A pension actuator should be appointed between you and your ex to work out a Pension Sharing order. It cost me and my ex wife £3000 between us to get this report. Standard practise is Equality of life at state pension age, although I had an additional feature added to exclude pre Aquired pension years, before I was cohabiting,with her, some 14 years I built up before I knew my ex wife. That was not considered at my FDR. Me and my ex wife to be have a 7 year gap, in essence she was 10 when I started contributing to my pension. Doesn’t it sound so wrong that in essence a girl of 10 was actually earning money throughout secondary school via my pension , 35 years later she will get the 14 years I wasn’t with her. Some country’s recognise this , but not in the uk
Re: Expected Financial Split?
December 25, 2023 11:31AM
When I went through my divorce my solicitors costs were minimal compared to my ex wife’s. I only went to the solicitor for the things I needed their input on whereas my ex wife had her solicitor do everything for her.
Re: Expected Financial Split?
December 27, 2023 09:07AM
Thanks guys. It's really helpful getting input from others who've been there as well as David.

She's in freeze mode a little so she's doing everything through a solicitor (Her work provide it). She's not able to discuss the details, not because of arguments just because she's in shock. (Ps she's divorcing me and I'm genuinely very calm and reasonable (I think))

As suggested I'll leave my solicitor's input until a proposal arrives. I'm trying very hard to be kind and unemotional about all this. Any tips?
Re: Expected Financial Split?
December 27, 2023 06:08PM
Often it is not possible to have a constructive conversation with the other spouse but this can vary from day to day. Most times a person may be unresponsive but occasionally that can change. It is always a good idea to be alert to this because having to do everything through a solicitor tends to (1) make everything last much longer, (2) costs more and (3) is a lot more stressful. Direct dicussion is best when it can be achieved.

Having said that, it also often takes some time for a person to come round to that (if at all). If, say, one spouse has just discovered the other has committed adultery it is usually unproductive to try reasonable discussion. At very best a person needs time to adjust to that situation before it is possible to have a reasonable discussion. The adultery example is a bit extreme because often n matter how much time is allowed before broaching the subject no reasonable discussion is possible. All the same, similar log jams arise in many cases. Often it is counter productive to try to force the issue before the other is ready but also sometimes discussion is possible after allowing a reasonable time to elapse.
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