Buyout spouse before divorced - Any help appreciated

doctor-dee

Hi
My wife and I are separated (not legally) and are about to commence divorce proceedings. We haven't done anything at this stage. We have both maintained from the start that financially it should be amicable and as clean as possible, neither want things drawn out.

We have no children. We earn roughly the same. Since day 1 we have only ever done things jointly, never separate monies/accounts. We have already split cash assets 50/50 and are not interested in each other's pensions.

We have 3 houses. 2 owned jointly (as joint tenants), one of which is the marital home. The 3rd is in my wife's name only. It was her's for 6 years before we started seeing each other and bought our first house together. For the last 7 years we have jointly paid the mortgage but allowed family to live in it. I have stated that I have no ongoing interest in this property or the equity in it.

We have agreed that I shall buy my wife out of the marital home for a sum equal to half of the present equity. She will then give me a sum of money for our 2nd property (let's say that also is equal to half of the equity, although it does value it somewhat under market price).

What I would like to know is this...
I intend to buy out my wife, not with marital funds, but with a cash injection from either a friend or member of my family. The family member will then be joint tenants with me and have an equal share of the ongoing equity in the house. As this is happening before we are divorced what rights does my wife have for later coming back for a share of the house? It has all been agreed through the mortgage company and a solicitor will be used to change the names and record that it has been for financial consideration.

In my view I think I am being very fair in that I'm not seeking any equity from the 3rd property (considerable). And for this reason I don't expect there to be any about turns on what we have agreed. But, you never know. Most importantly I want to protect my relative who is investing in this with me.

I will probably consult a solicitor anyway but just to do the bare essentials. I really don't want to pay for hours of their time as we are both in agreement about how we should proceed at this stage.

I would like to switch the mortgage arrangements as soon as possible (we both do) in order that we are settled in our own houses and paying our own bills.

I would appreciate any help on this. (Polite notice) I know I should consult a solicitor to be sure, I just want to know if anyone KNOWS or has had any dealings like this before.

Thanks. David.

Poppy9

TBH I would go through legal channels to sort this out but you could present your case concisely to the solicitor by putting it in a simple table.

Regarding the 3rd house I really don't think it's fair you walk away with nothing as you've paid 1/2 the mortgage for 7 years. I think you should get back 50% of the mortgage payments i.e. say it was £500 per month for 7 years you would get back £250 x 84 £21,000. That way she is back in the position she was upon meeting you.

The trouble is with trying to be nice about it etc. is that months/years later a family member/friend/new partner enters the mix and winds you up about how you were robbed and then bad feelings develop. So if you are going to be totally fair then go 50/50 on everything.

mustmakealist

If you both agree then you can instruct a solicitor to draw up an agreement that sets out what you have both agreed. This is what I and my ex did. By getting a solicitor to do this it should be a watertight agreement that will stand up if later challenged. You could also make sure that this takes place on your divorce to ensure that everything happens at the correct time - a bit like buying a house, when the agreements are drawn up in advance but become effective on completion.

I think you are being very considerate. Money isn't everything, despite what some (including solicitors) would have you believe. The opportunity to walk away with your self respect and dignity intact are priceless.

good luck

mgdavid

you tell your solicitor what you both want and agree.
He draws up the settlement document that is submitted to court with the divorce papers. The doc must make it clear this is a 'clean break' agreement. After decree nisi, that's it, no comeback.
The key is the 'clean break' agreement.

Seanymph

she would still have a claim on half of your remaining half.

So you could do all that with the best of intentions, and if she decides that she isn't happy she then can go for half of everything you have left in your name DESPITE what you've already handed over.

The divorce will have two seperate parts - the end of the marriage and the financial arrangement - both will have to be submitted to court and be ratified by the court.

So you will have to do that work with a solicitor (or without) in due course - why hurry to hand over money before you go through that process? Handing over the money and settling things should be part of that process and then you are protecting yourself.

Saving money on a solicitor could well cost you more in the long run.

benb76

I think that you're being overly generous with regard to the 3rd property as you have repaid a significant amount of capital on this property. The normal way that this would be resolved in an amicable divorce would be that you work out the equity in this property when you got married (and started paying towards the mortgage) and the equity now. It would be perfectly reasonable to claim half of the difference, this can then be used to offset part of the cost of buying your wife's share of the equity in your marital home.

Lance

I would go for a clean break and make all finacial arrangements as part of the divorce. If you both agree the marrage has broken down etc then a divorce shouldn't take long and you'd only have one lot of solicitors fees. At least then you will see her full financial demands written down and can work from there.

doctor-dee

Thanks for the replies so far. Doing it all at once would make sense and is probably the usual thing to do. However, I feel it is emotionally easier to do this bit first and as quickly as possible. From what some people have said, it sounds like a solicitor could draw up a written signed agreement that can be submitted when the time comes for the clean break / consent order to back things up. I think what I'll do as a semi-cautious measure in the interim period is have the new deeds drawn up as tenants in common 50/50. It should at least protect half of the equity in the property.

Any other thoughts greatly appreciated.

Imelda

Yes, you can do it that way. Have a separation agreement drawn up now which is then made into a consent order and sealed by the court once you have reached decree nisi stage. As part of the agreement you can state who and when the divorce will happen- ie once you have been separated for 2yrs you agree to divorce by consent.

If you have already been separated for 2yrs then I would strongly suggest you make the financial settlement as part of a divorce (if you haven't then you will only be able to divorce on the basis of fault). It is the ONLY way you can make it a clean break, a separation agreement is just that- an agreement and it can be broken, you would then have the hassle of enforcing it.

I agree you could look to getting more out of the arrangement but if you're happy with it then I wouldn't suggest arguing over it, solicitors bills will just erode your pot.

Imelda

oh and yes sever the tenancy and make a new will to state where you would like your share to go should the worst happen.