Divorce and house equity

cxgcxg

Hi there,

I'm hoping to receive some advice on options with regard to splitting houe equity after divorce.

We recently have the decree absolute and we've agreed that we will have the property valued and 50% of the equity will go to my wife. I will keep the house and live here with our son. She knows I can't afford to give her the amount as a lump sum and I cannot remortgage to unlock funds (bought via a shared ownership scheme). She will pay me monthly maintenance for our child. She also says (now at least) that she wants the money for our son when he grows up.

How would you go about 'giving' this 50% of equity to her?

Thanks

Browntoa

if you are both on the land registry title as Joint Tenants then she already has 50%


https://www.gov.uk/joint-property-ownership/overview

lika_86

Agree that the house will be sold when your son reaches 18 (or the end of that school year anyway) and that she'll get a lump sum then?

burlington6

Be careful OP. I have a friend who did exactly what you're thinking.

His wife left him, he stayed in the house with the kids and paid her off.

She flattened the money in no time, the guy she was living with had enough and she came crawling back.

My friend ( who is pathetically weak ) took her back and three months later she kicked him out, changed the locks and is still living in the house with the children.

He went from holding all the cards to having nothing.

TBagpuss

It's a fairly common type of order.
It's worth getting a solicitor to draw it up correctly .

There are two ways of doing it.
1. If the lender will agree to the house and exisiting mortgage going into your sole name, then do this, and then your wife has a legal charge over the property for a lump sum equivalent to x% of the value (where x = 50% of current equity expressed as a % of current house value) payable on set 'trigger points' being reached. One trigger is when the child turns 18 or completes secondary eductation, but it is common to have others, such as if you remarry.
2. If the lender will not agree to take her off the mortgage, then the alternative is that you have an order which explicitly sets out your respective rights and responsibilities, in particular that she is not entitled to occupy the house, that you will do your best to get her off the mortgage as soon as you are able to do so and that you will be respnsible for the mrtgage and other outgoings. The order will then set out that the house is held on trust for sale for the two of you and define the shares, and set out when it is to be sold (again, youngest child turning 18 etc) Normally there would also be provision to allow you to move to a new home on the same terms if necessary.

The second option is less satisfactory as it leaves her at risk of being persued if you get into financial dificulties and default on the mortgage, you remain financially associated so poor credit for one of you could affect the other, and it might (depending on circumstances) have implications for her in relation to CGT in the future.

She can chose to then gift her lump sum to your son when he is older, or invest it and leave it to him in her will, but the arrangements between you and her would not normally nind her to do that as it is up to her hpow she eals with her share of the assets.

mark5

Personally if I couldn't afford to buy her out, I would sell, split the equity and buy something that I could afford that's mine. The ex can pick up half the selling fees at the same time then.

I never understand with divorces why men and women are so eager to hold on to joint assets rather than get a fresh start.