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How do I make my inheritance safe from unfaithful husband

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  • Snakey
    Snakey Posts: 1,174 Forumite
    Sorry to hear about your divorce, after being together for the whole of your adult life that's going to mean some big changes. You sound a whole lot more positive than a lot of people in your position would be.

    The first thing I would do is get legal advice about what you can expect to happen financially - there seems to be some doubt over whether this money is "yours" (in a non-moral sense) and that needs to be clarified because the difference between £650k and £325k might change your plans and even if things are relatively amicable between you and your husband right now, things can change and you can't rely on other people's continued goodwill and willingness to "do the right thing" when it could be massively to their own detriment. We are all only human.

    Depending on what the housing market's like in the place you plan to buy (and on how definite those plans are, of course), you could maybe buy the house now and rent it out so that it's there when you are ready to move? You don't want to be putting all that cash in the stock market for such a short time, but equally the rate of return you'll get from savings accounts is way below inflation.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    polymaff wrote: »
    If that's the timescale, better to put it into the three-year product and pay the penalty?

    Depends on your tax rate and when it is you actually want to cash it in.

    Imagine you deposit £1000 ; after a year you have earned £13 net of high rate tax by using the 3 year product (2.17% gross) or £8.80 net of high rate tax by using the one year product (1.47% gross). So after that year, when the one year product naturally matures, you can afford to pay about £4.20 of penalty if you need to exit the longer term product early.

    However, a penalty charge of 90 days interest on something that pays 2.17% is going to be over £5, which is more than you can spare if you only have an extra £4.20 in the kitty.

    It can be a pain working out all the permutations of what terms and penalties are available, and even with relatively shorter fixes there is always the chance that prevailing market rates will move in the market and you won't want to be stuck on a low rate. So when suggesting easy products to use I generally don't bother looking at all the terms longer than people want and doing the maths for them "just in case".

    The point was really just that the Direct Saver, though a 'safe bet', was beaten by at least two easy products. If the OP wanted to give me the £500 she was quoted by "a financial company" to look at options, I might take more interest.

    Haha, 'take more interest'. I made a funny.
  • Some excellent advice to which I can't add. However, I would like to pass on my best wishes to you, and hope that the future is a lot kinder.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    Snakey wrote: »
    Depending on what the housing market's like in the place you plan to buy (and on how definite those plans are, of course), you could maybe buy the house now and rent it out so that it's there when you are ready to move?
    Isn't the issue that until all the finances are sorted post divorce, she doesn't know exactly what her financial situation will be?

    It would seem a bit reckless to guess how much money you'll have and then go and spend it right now in the hope you get it right. Especially when buying a property now might incur an extra layer of stamp duty for it being a second home (assuming they already have a matrimonial one)
    You don't want to be putting all that cash in the stock market for such a short time/
    I'd replace "all that" with "any of that", if up to 100% might be needed to buy property or for other arrangements
    but equally the rate of return you'll get from savings accounts is way below inflation.
    Well, you don't know what inflation will be over the next year, only what it was over the last year. If NS&I pay double the BoE base interest rate for instant access or about triple the base rate on a one year fix, they are pretty much the main practical choices unless you really want to use 8+ accounts. There is probably more things in life to focus on at the moment than trying to eke out another bit of a percent. A year or two isn't too long to put the interest-maximizing quest on hold for a bit, in pursuit of an easy life.

    I agree with your other comments though.
  • Hi OP,
    I am same age as you and been married 30 years. I can’t imagine being in your position. I can’t help with the financial stuff but just wanted to say I feel for you and hope things turn out as you would like.
  • Snakey
    Snakey Posts: 1,174 Forumite
    Fair enough, B. I'd assumed that her expectation was that she'd have at least £650k (of inheritance) plus half of whatever was left from the marital assets once the dust settled, and planned to spend some/most of the £650k on a house. In most of the country you could take your pick of family homes for that money, although there's a chance she's in London where it might only get you a two-bed flat and so you would need to wait so you could copper up from the entire settlement (or move).

    And of course you are right about the SDLT. I forget what the time limit is for buying a new residence before the old one is sold (and I'm not sure that works if you rent it out in the interim) but at the very least it would be a cash-flow disadvantage.

    At 51, if her kids are still young she's probably got (or given up recently enough to pick it back up again) a career of her own and hopefully a half-decent pension, so at least the capital won't have to also stretch to subsdise a low income.
  • polymaff
    polymaff Posts: 3,950 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    bowlhead99 wrote: »
    Depends on your tax rate and when it is you actually want to cash it in.

    Imagine you deposit £1000 ; after a year you have earned £13 net of high rate tax by using the 3 year product (2.17% gross) or £8.80 net of high rate tax by using the one year product (1.47% gross). So after that year, when the one year product naturally matures, you can afford to pay about £4.20 of penalty if you need to exit the longer term product early.

    However, a penalty charge of 90 days interest on something that pays 2.17% is going to be over £5, which is more than you can spare if you only have an extra £4.20 in the kitty.

    It can be a pain working out all the permutations of what terms and penalties are available, and even with relatively shorter fixes there is always the chance that prevailing market rates will move in the market and you won't want to be stuck on a low rate. So when suggesting easy products to use I generally don't bother looking at all the terms longer than people want and doing the maths for them "just in case".

    The point was really just that the Direct Saver, though a 'safe bet', was beaten by at least two easy products. If the OP wanted to give me the £500 she was quoted by "a financial company" to look at options, I might take more interest.

    Haha, 'take more interest'. I made a funny.

    You're scraping the bottom of the bowl - see, I can pun, too - by putting a case where no allowances are, and no BRB is, available - and by implying that the predicted closure date (somewhere in 2019, remember?) is twelve months away. Hardly representative of the case outlined by the OP or of a typical circumstance.

    Oh, and you've misquoted an interest rate.

    Not your finest hour, BH :)
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
    Be careful that the company you want to use arnt scammers!
  • I forgot to say, if you do buy any premium bonds then do so after the divorce is final just in case you win and have to split the winnings...
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The status of your inheritance may depend on whether you will be using Scots Law or English Law for your divorce. Scots Law seems (to my eye) usually to be more rational.
    Free the dunston one next time too.
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