Advice on division of assets in divorce

enthusiasticsaver

pmlindyloo wrote: »

Since your sister and her ex husband appear to have an amicable relationship at the moment then I would strongly suggest that they attend mediation together. This is a very cost efficient way of settling all financial matters.

Perhaps, more importantly, the final decisions can be made into a legal document which is binding.

The possible problem with deciding between themselves without a legally binding agreement is that some time in the future both their personal situations might change. Both need to be 'protected' in case of this.

There is a good link here:

https://www.citizensadvice.org.uk/family/ending-a-relationship/how-to-separate/mediation-to-help-you-separate/

That is useful. Thanks. I will suggest that.

elsien

Your sister may find that the money gifted and used for the house counts as a marital asset should everything get thrown into the pot, so would not entitle her to a higher proportion of the equity in the house.

enthusiasticsaver

elsien wrote: »

Your sister may find that the money gifted and used for the house counts as a marital asset should everything get thrown into the pot, so would not entitle her to a higher proportion of the equity in the house.

Yes, I think I mentioned that. My brother in law has said he recognises the amount she has put in though as hers and as the divorce is his choice and not hers he has said he is willing to forego a large share of his equity of the home. They are both trying to do this amicably but after 29 years this is hard for my sister. I don't know how long my brother in law has had it in mind to leave but I think he waited until the children were older.

As I said I think my sister recognises he is being fair and she would receive much less if it went to court. Someone on the pensions board mentioned that you can get a pension divorce CETV so I am going to suggest she gets those for her pension and asks him to do the same for his. Given he is giving up a large share of equity on the house I should think she should do the same for the pension but she will be in a much worse position than if they had remained married.

Tom99

[FONT=Verdana, sans-serif]After 29 years and with grown up children, a 50/50 split of all assets would be seen as fair.

[/FONT] [FONT=Verdana, sans-serif]That should take into account the capital value of both parties pensions and other assets even if these were a gift.

[/FONT] [FONT=Verdana, sans-serif]The husband has offered the wife c £620k more of the house equity so even if his pension is worth £620k and the wife's nothing, that still represents a 50/50 split.

[/FONT] [FONT=Verdana, sans-serif]I assume they will be applying for a financial consent order and if not already part of the financial assets disclosed, the judge may well ask for the capital value of each pension to see that the split seems fair.

[/FONT] [FONT=Verdana, sans-serif]Whilst you are looking out for your sister, a true 50/50 split may see her worse off than the current offer. She gets to stay in the family home with no mortgage and with one adult child able to contribute towards bills.[/FONT]

Pollycat

enthusiasticsaver wrote: »

Yes, I think I mentioned that. My brother in law has said he recognises the amount she has put in though as hers and as the divorce is his choice and not hers he has said he is willing to forego a large share of his equity of the home. They are both trying to do this amicably but after 29 years this is hard for my sister. I don't know how long my brother in law has had it in mind to leave but I think he waited until the children were older.

As I said I think my sister recognises he is being fair and she would receive much less if it went to court. Someone on the pensions board mentioned that you can get a pension divorce CETV so I am going to suggest she gets those for her pension and asks him to do the same for his. Given he is giving up a large share of equity on the house I should think she should do the same for the pension but she will be in a much worse position than if they had remained married.

But he might not feel so generous when your sister starts asking for a share of his pension.

neneromanova

enthusiasticsaver wrote: »

The savings were part of her inheritance or family gift from my mum. They were married when she received them but technically the money is hers and he agrees with that. He is not being unreasonable and my sister agrees with that.

That's not how a court would see it. The money was accrued in the marriage so it both of theirs legally.

so the court would look at it like this:

House £750k
Pension £500k
Total: £1.25m / 2 = £625k

The fact he's only asking for £70k from the inheritance and keeping his pension he's only getting £570k out of the divorce. She is quids up. If she feels she won't be able to downsize due to London house prices, She'll have to move to the outskirts of London eg Reading/Wokingham/Chelmsford etc.

You can get a really nice house for £350k so she'd have £400k left over for her pension.

Say she retires at 65, and giving her 20 more years on top of that (obviously we'd all love more) £400k/20yrs = £20k a year plus state pension of roughly £164.35 a week (from 2018/19 apparently) = £28543 a year or £2300pm (+ whatever pension she gets from a job)

That's not bad I don't think with only bills and food to spend the money on.

I'd leave the pension alone as he could become not amicable and say actually, sell now and here's £375k now and you can have some of my pension in 16 years.

enthusiasticsaver

neneromanova wrote: »

That's not how a court would see it. The money was accrued in the marriage so it both of theirs legally.

so the court would look at it like this:

House £750k
Pension £500k
Total: £1.25m / 2 = £625k

The fact he's only asking for £70k from the inheritance and keeping his pension he's only getting £570k out of the divorce. She is quids up. If she feels she won't be able to downsize due to London house prices, She'll have to move to the outskirts of London eg Reading/Wokingham/Chelmsford etc.

You can get a really nice house for £350k so she'd have £400k left over for her pension.

Say she retires at 65, and giving her 20 more years on top of that (obviously we'd all love more) £400k/20yrs = £20k a year plus state pension of roughly £164.35 a week (from 2018/19 apparently) = £28543 a year or £2300pm (+ whatever pension she gets from a job)

That's not bad I don't think with only bills and food to spend the money on.

I'd leave the pension alone as he could become not amicable and say actually, sell now and here's £375k now and you can have some of my pension in 16 years.

He says he won't go to court and wants to come to a mutual arrangement as he thinks the costs will be expensive and they can reach an amicable solution. He is likely to come into an inheritance himself in the near future and my sister has said she will not make any claim on that given he is making allowances for hers.

I have pointed out to her that he will have to get another mortgage so he is in a worse position than her now going forward. Her feeling is that she sacrificed a good deal of her career while his went from strength to strength and she now earns a fraction of his income. Consequently in retirement it will be better but as you have pointed out the house can be sold and she move further out but she adamantly does not see why she should have to do that.

Her future going forward is not what she envisaged if they had stayed together. Her savings will now be used to buy him out rather than help their children with homes and rather than looking at early retirement as me and my DH have been able to do she is going to have to up her pension payments considerably and wait until the children have left home before she can either move and downsize and probably work until state pension age.

We always come down to the same thing, none of this was her choice. She says all marriages have ups and downs and she wanted them to work through it. My brother in law won't do this and is looking to move away (possibly with a girlfriend) and transfer to an office up North where property is cheaper. She is angry about that and he has acknowledged she has a point. It has broken the family apart really as my nephew is also very angry but I daresay divorce does that no matter how amicable people try to make it.

I am going to get her to ask for the CETV figures for divorce anyway as I think they should both have the full information and I am guessing any financial document will have to have them anyway. Financial mediation has also been mentioned so that is another option.

mgdavid

enthusiasticsaver wrote: »

The savings were part of her inheritance or family gift from my mum. They were married when she received them but technically the money is hers and he agrees with that........... .

No, 'technically' they are not hers, they are joint assets of the marriage and go into the total asset pot. A negotiated settlement will start at 50-50 split of the total asset sum and move from there. That is how divorce settlements in court work.

enthusiasticsaver

Pollycat wrote: »

But he might not feel so generous when your sister starts asking for a share of his pension.

She is not asking for a share of his pension yet as they are only throwing figures around and his main concern is that he has some cash to put a deposit down now on a property for him. He is now concerned that because my nephew works in London and my niece is studying there that they will not be moving out of the family home for some years yet. He wants a share now to start again. It is in his interests to sort it now whereas my sister is happy to wait until my nephew and niece have moved out and then they split the house proceeds and pensions.

My sister is not at all aware of the value of pensions and my brother in law most definitely is. He has not mentioned the pension, only the house. I am slightly concerned that not all the facts and figures are being considered as I am of the opinion that the pension is every bit as valuable as the family home. If she is giving him 10% of the equity then should he not give her a percentage of his pension? Without the figures I cannot see how they can determine a fair settlement. Also I wonder if he can split his pension now and give her the 50% pension credits on divorce I have seen mentioned and then they split the house proceeds when my niece and nephew are financially independent and the house is sold which my sister is happy to do with the split in her favour slightly to acknowledge the extra money she put into it and recognise her income as being much lower than his.

enthusiasticsaver

mgdavid wrote: »

No, 'technically' they are not hers, they are joint assets of the marriage and go into the total asset pot. A negotiated settlement will start at 50-50 split of the total asset sum and move from there. That is how divorce settlements in court work.

Do they have to go to court? My brother in law is saying he does not want that.