A well respected, award winning social enterprise
Volunteer run - Government and charity funded
We help 50,000 people a year through divorce

01202 805020

Lines open: Monday to Friday 9am-5pm
Call for FREE expert advice & service info


What are we each entitled to in our divorce settlement?

What does the law say about how to split the house, how to share pensions and other assets, and how much maintenance is payable.

What steps can we take to reach a fair agreement?

The four basic steps to reaching an agreement on divorce finances are: disclosure, getting advice, negotiating and implementing a Consent Order.

What is a Consent Order and why do we need one?

A Consent Order is a legally binding document that finalises a divorcing couple's agreement on property, pensions and other assets.


Marital Home etc

  • paraclete
  • paraclete's Avatar Posted by
  • Premium Member
  • Premium Member
More
14 May 12 #330507 by paraclete
Topic started by paraclete
Hi,

Reposting from the ''Introduce Yourself'' forum, in the hope of some more interest. Apologies if this is not the done thing.

Having rented for many years, my wife and I bought a house at the end of last year. Not the greatest of timings, I must admit.

The house was £400k, and the balance was made up of £200k from me, £100k from her, and £100k joint mortgage. We always talked about splitting ownership 65%/35% in my favour, but as yet have not signed any deed to this effect.

I set up my own consultance company last year and, while I collect fees in the region of £130k per year, I pay myself and my wife nominal salaries of £1k and £500 respectively.

My current contract has me working away from home for most of the week, and I rent a room near to my contract. I am interested in any implications that this might have re the family home.

I have learned today that my current contract is not going to be renewed in July, hence I will have no money coming in to the company. Great week so far! There is a surplus of cash within the company though, and so I intend to continue paying both myself and my wife.

Would appreciate any advice regarding what my position is, and what I should do to preserve my position with regard to the matrimonial home in particular.

*** since writing the originsl post, she has advised that she intends to stay in the marital home for another 10 years, until our daughter leaves school. She has two sons from a previous marriage, that both live with her. The house is a 5 bed house. Can she really do this? I know I have an obligation to provide accommodation for my daughter, but surely this does not entail a five bedroom house, that has taken every cent that I have to my name?


Look forward to gentle responses.

Thanks in advance.

  • Lostboy67
  • Lostboy67's Avatar
  • Moderator
  • Moderator
More
14 May 12 #330533 by Lostboy67
Reply from Lostboy67
Hi
Its difficult for anyone to give an answer without the following

Your respective ages;

The number of children you have and their ages;

How many nights the children spend with each parent;

The length of your marriage and any period of pre marriage cohabitation;

Your respective incomes;

Your respective outgoings;

Your assets - both soley held and joint;

Your liabilities.

Strictly speaking her need in terms of housing would be a 3 bedroom property (depending on the age of her sons)


LB

  • paraclete
  • paraclete's Avatar Posted by
  • Premium Member
  • Premium Member
More
14 May 12 #330537 by paraclete
Reply from paraclete
Hi,

Thanks so much for the response. Can answer the questions as follows:

- Ages: both 44
- Children: My stepsons are 16 & 14, our daughter is 7. I have two 18 year old daughters from a previous relationship, that live with their mother, so probably not relevant.
- Her sons spend every other weekend and roughly half of holidays with their dad. I still live in the marital home at weekends.
- Length of marriage 5 years; we cohabited for around 5 years beforehand
- I own my own company, with a turnover of around £130k, but I only pay myself £1k per month. I currently pay her £500 pcm. The company has a bank balance of around £70k.
- I pay all bills etc, the mortgage is around £540 pcm, the others probably total around another £500 pcm. There are also school fees that I have paid upfront for my youngest daughter; in another year or so, these will resume at around another £1k pcm
- The only real asset that we have of any value is the house, which is worth around £400k, with a mortgage of £100k.

Hope this helps, but reassuring to know that she does not appear to have full claim to the 5 bed house.

With the house that needs to be provided, am I fully liable, or is ex-husband-number1 partially liable? And, does it have to be bought outright, or is rental an option that a Court would consider.

Thanks so much for the response, and look forward to any further info that you might be able to advise based on the above.

Thanks in advance.

  • cookie2
  • cookie2's Avatar
  • Platinum Member
  • Platinum Member
More
15 May 12 #330595 by cookie2
Reply from cookie2
paraclete wrote:

With the house that needs to be provided, am I fully liable, or is ex-husband-number1 partially liable?

No, ex-husband-number-1 will not be liable. He will still have to pay child maintenance of course, but his obligations to house her and the kids by means of a lump sum payment would have ended when they signed their Consent Order. Especially since she has re-married. Nope, going after him is definitely a wild goose chase.

And, does it have to be bought outright, or is rental an option that a Court would consider.

With £300k equity, £130k income, 3 kids and a long history of living in non-rented accommodation, no, a court would never consider ordering her into rented accommodation in a million years.

I have two 18 year old daughters from a previous relationship, that live with their mother, so probably not relevant.

If you are paying child maintenance for these 2, then it will be relevant in that regard. You can contact the CSA with your details to get accurate info, but to the best of my knowledge, you pay 25% of your income for 3 kids. The mother of the first 2 would get 2/3 of that amount, and your current wife would get 1/3.

As for as division of capital goes, no, they won''t be relevant.


The 5-bed house may be considered too large and a sale may probably be on the cards, really it depends on the figures. She has 3 kids therefore will need a 4 bed house. How much equity would realistically be released by downsizing to a 4-bed house nearby?

Where will your wife''s income come from after the divorce? Presumably she will not continue to work for your company? Will she find work elsewhere and if so what kind of earning bracket will she be in?

  • paraclete
  • paraclete's Avatar Posted by
  • Premium Member
  • Premium Member
More
15 May 12 #330602 by paraclete
Reply from paraclete
Hi Cookie,

Thanks for the response.

Sounds like she moves up from a 3 bed house to a 4 bed house, but hey-ho. Guess we could release up to £100k in equity by downsizing to a 4-bed, depending on exactly where she wants this 4-bed to be (does she get a choice?). Note though that the house is in the middle (beginning) of a makeover, and needs considerable work done in order to become saleable. I was partway through putting in a new main bathroom when the news came, so currently there is only one shower and two toilets in the house. Not surprisingly, I am not overly enthused about a weekend of decorating ahead of me.

Should clarify that there is no long history of living in a non-rented house. We bought in December last year but, prior to that, had lived in rental for 9.5 years. Does this make a difference?

Will my income be classified as £12k pa, which is what I pay myself, or £130k, which is roughly what the turnover has been in the last 12 months? Note also that my contract is ending in July, and I am probably going to need to take some time to focus on the divorce etc, and thus will need several months out.

I want this to be as amicable as possible, and have every intention of ensuring that life is as comfortable as possible for everyone. Have suggested to her that I continue to pay her through the company, as this seems the most tax efficient way of doing so. If I pay myself, then pay her, a portion becomes eroded through tax, and so there is less in the pot to pay with. There is plenty in the company for now to allow me to continue paying everyone, even if I do need 6 months or so out.

Hope this clarifies, and look forward to any additional thoughts that you might have, particularly in respect of the difference that the rental history might make.

Thanks again for taking the time & trouble to reply.

  • somuch2know2
  • somuch2know2's Avatar
  • Platinum Member
  • Platinum Member
More
15 May 12 #330608 by somuch2know2
Reply from somuch2know2
Well your ex made out well didnt she?

Need is based on exactly that. Your 2 sons are around the same age so you might be able to say they should share- but if that status quo is they have their own room, then that may be hard. courts would hate to see children "suffer" by having to share with a sibbling. Find the CHEAPESt 4 bedrooms you can find- that will satisfy the need, and that is exactly what my barrister told me to do.

Try and stay amicable- but dont be surprised when it all goes to pot because you wont give her what she wants...

If you have been giving yourself an income of 1K a month over a several years than that is your income. Your turnover is NOT income- although they will look at dividends you pay yourself- this will be all evident in your P60 (which you will have to produce)

  • paraclete
  • paraclete's Avatar Posted by
  • Premium Member
  • Premium Member
More
15 May 12 #330612 by paraclete
Reply from paraclete
Thanks somuch2know2.

Yep, didn''t she do well. Should really have seen it all coming, but hindsight is a great thing.

She has been pushing me to pay myself a dividend over the last few weeks, but I never got around to doing it fortunately.

Company only established in September last year (used an umbrella beforehand), and have only received £5k in salary since, paid £1k per month over the last 5 months.

Went in and out of the family courts with my elder two, so know well that it is best to keep solicitors out of things.

Funny though that a person can say that they want everything on an amicable basis, and in the next mail, for no reason at all, heap a load of abuse on you, and tell you that they are taking your house away. You never stop learning about life, and people.

Thanks for the response, it is nice to know that people are thinking of me. Have thrown everything into work, with no social life, and it is only now that I realise that she was the only friend that I had, and that I have no support network available to me.

Moderators: wikivorce teamrubytuesdaydukeyhadenoughnowTetsSheziLinda SheridanForsetiMitchumWhiteRoseLostboy67WYSPECIALBubblegum11