Hi, I'm currently negotiating my settlement, and am really concerned that my solicitor isnt offering me sound advice. I would be so grateful if someone would spare the time to read whats concerning me, and offer an opinion.
I am still in the family home, and my ex has agreed its best for the children if I stay until the youngest reaches 18 or finishes education. She is currently 10.
He will give me half of his pensions, and we will split the equity of the house 67/33 in my favour.
He will pay me the monthly CSA amount for the children, (we have 2 ages 14 and 10), and on top of this one third of the cost of the mortgage per month.
We have come to this agreement because I wanted him to keep his pensions, and I keep the equity. His pensions are worth 60k, the equity in the home is £70k. But he wanted money sooner than retirement. He earns £41k I earn £14k
My concern is: There is no amount for spousal maintenance per month. If I sell our house next year, I give him his 33%, and he will stop paying the extra per month. However, my new house will cost just as much to run, and I will still be working part time.
We were married 18years and together 20. I have always worked part time to support him and look after the children. I dont know how to make sure I am covered financially should I decide to sell as early as next year.
"he will pay me ...... one third of the cost of the mortgage per month."
That payment is SM, and if circumstances change a court variation will be required.
"His pensions are worth 60k, the equity in the home is ï¿½70k."
The of value of different classes of assets are treated differently so a pension might be considered as little as 25% of the value of same amount of liquid assets.
His proposal is that he will cease paying the equivilant of one third of the mortgage if I sell, amongst other events.
I'll get my solicitor to tell him I want it recognised as SM.
Also - do you happen to know if a court would take into account his company benefits such as a company car, pension, health insurance, golf and gym membership when looking at child maintenance? He is basing what he should pay me on CSA guidelines, but he is taxed heavily for these "perks" and as the CSA calculates on nett income, I cant help but feel slightly aggrieved that I am getting less for the children because of it.
Is the 67/33 split in equity in your favour on the basis that you need to stay in the FMH to provide housing for the children until they reach 18?
From your post you refer to possibly selling the FMH as early as next year when youngest child is 11, thereby having no long term need to remain in the FMH?
You state your husband is giving you half of his pension so that you can keep the equity in the house, that being 67% as he assumes you will remain there for the benefit of your children until they reach 18?
As a previous post advises, cash equivalent today against something many years away does not equate to the same value.
My understanding of the curent CSA system is that the percentage rate is deducted from net income although I believe there are proposals to reduce the overall percentage rates and then deduct from gross, in order to combat the "perks" reduction in net pay you refer to. On current rules I believe it will be from net pay.
I'm sure they could confirm this over the phone to you, or maybe clearer information is on the csa website?
Is it possible you could return to work full time in order to provide more income for the children?
The CSA calculation together with current tax credit calculation and child benefit are to ensure that lone parents are financially able to support their children without undue hardship.
It seems that with your salary, tax credits, child maintenance, child benefit and one third of the mortgage payments you would able to provide a reasonable standard of living for you and your children following the divorce, it is assumed that both parties standard of living will inevitable be adjusted.
Whether or not the amount of spousal maintencance continued after you sold the FMH is not guaranteed.
Spousal maintenance is awarded when one party cannot meet their own "needs" and the other has the ability to pay it.
Spousal maintenace awards are not fixed amounts in the same way that child maintenance is, therefore BOTH parties can apply fr a variance in the amount should any circumstances change.
If you did get into financial difficulty futher down the line and needed to sell the FMH maybe to downsize? you would of course have the 67% equity to fall back on
I would suggest that the legal advise you are receiving appears to be quite sound.
There is no caveat that I need to stay in the FMH until the youngest is 18. I would prefer to stay in the house until then simply because my son is about to start his GCSE's and having spoken to friends who have "come out the other side" the biggest thing they regret is giving up the fmh. That destabilised the children more than anything in their experience.
However I am being realistic. No one knows what the future holds, and I just want to make sure I am sensible, and covering "what ifs" where possible. I mention moving next year as an example only.
I work 4 full days a week, I dont earn very much, but I am retraining with a view to being able to support myself and our children. I have a two hour commute each day. Without being dreary our mortgage is quite a lot, and after bills I am not left with an awful lot of money. In fact things are quite tight. (I can recommend divorce as a huge incentive to grown your own veg! I've become very fond of my greenhouse!)
My husband has mentioned on more than one occassion that he would prefer the house to be sold - even though he has agreed in principle not to. He has significant debts and his share would ease this. In fact we both took equal share of the debt, however I have had help from family to clear the majority of mine - although I am still paying £100 a month to clear the remainder.
The equity split was agreed because I very much wanted a Clean Break in the form of him keeping his pensions and I keep the equity. He didnt want this, and he came up with the percentage split, he will get 33% of the equity based on whatever the house is worth at time of sale, and not at present value. His view is he will at least have some money to look forward to in the next 8 years rather than wait till retirement. The pensions will be split at current transfer value.
I feel it very necessary to point out that we are on good terms, but are both under pressure financially and he has lied to me on a number of occassions re money.
If I were to downsize in this area, (I couldnt afford to live near my work) I would need a mortgage only 10k smaller than my existing. (I appreciate utilities will be less) This is why I am concerned. I would still need more than just child maintenance to be able to offer the children a decent standard of living, it would need to be supported with SM. Which in its current format will cease upon sale.
I may not move. Hell I may even get ran over by a bus tomorrow! I am just trying to make sure my future with the children is covered as much as possible and should selling the FMH be a path we have to go down, that we'll be ok. I am finding the responsiblity of making such decisions overwhelming, and am frightened I might be making mistakes as I'm sure everyone in my situation is.
I have spoken to the CSA - It wasnt the best experience in the world and I came off the phone none the wiser although I did learn a lot about the advisors daughter and her company car! It was blue in case you're wondering!
Thank you for reading - I hope I havent drivelled on too much.
The FMH is a contentious issue because of current property prices. A decade ago pensions were doing very well and that was a contentious issue back then.
Supporting two homes instead of one is certainly not easy. However, in some areas apparently courts will not approve a Consent Order unless there is at least a nominal amount of SM until the children reach at least 18 as a safeguard to protect children should the pwc lose their job, or not be able to work due to illness. As long as there is no bar in the wording you can apply for a variation before the order expires.
The CSA staff are usually only able to answer routine enquiries and don't always get that right. If you browse the staff guides you might find the info specific to your case that you need. See;-