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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.


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Implications of job loss on Financial settlement

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05 May 20 - 08 May 20 #512295 by Chevette
Topic started by Chevette
Hi All, I hope that everyone is doing ok in these very difficult circumstances.

I am going through a divorce, Decree Nisi granted last month. Now due to corona virus there is a strong risk that either my wife or myself could lose our jobs.

Therefore I have an important question concerning a financial settlement that I would like to ask.

1, Will a financial settlement be affected if I or my Wife lose our jobs, which is a very real prospect? In which case our earning potentials could become zero or much lower than they currently are?


Heres the background
10 yr marriage no kids, co-habited in my house 10 months before marriage but wife did not contribute towards house until 3 months before marriage, both working. Me 51 her 47, I earn £42k she £33k. Wife has refused to discuss any financial settlement & cancelled mediation.
Finances
Pensions
Me- Pot started 1988 worth £650k/ pot accrued during marriage £165k
Her- Pot started 1998 worth £170k/ pot accrued during marriage £110k
So if pension ring fenced I think I will owe her £27,500
FMH equity £420k (4 bed detached house)
Minus a ‘Deed of Trust’ in place to ring fence £210k equity for me. The house was purchased by me with a large deposit before meeting my Wife.
FMH equity after DOT £210k
Buy To Let Flat equity £70K

A two bedroom flat in our area starts at £240k

I thought a fair deal would be for me to keep my DOT money £210k & to split the remaining property equity 50/50 so £140k each.
Plus I give her a cash amount for the ring fenced pension, £27,500, or less as its ‘liquid cash’.
With the Deed of Trust I would have £210k + £140k=£350k
My wife would have £140k + £27,500k from pension ring fencing =£167,500k

I know some on this forum may say it seems heavily weighted in my favour. But it simply reflects assets I accrued many years before meeting my wife and there are no children involved. When we met My wife had no assets and moved into my house.
It does split everything accrued since we co-habited and then married 50/50.

For 6 months my Wife has refused to engage at all in reaching a financial settlement and has cancelled mediation after the initial session. I am sure she will not want to ring fence pensions or honour the Deed of Trust and is after a 50/50 split of everything.

She has been trying to obtain extra funds since January. She has just moved out of the house and is refusing to make any payments towards it except council tax.
I believe she is trying to raise funds in order to go to court because that is the only way that she can try to overturn the ‘Deed of Trust’ which was entered into with full independent legal advice and some years into our marriage.

Now with the prospect of unemployment looming I would really appreciate any advice on how it could affect a financial settlement if it goes to court.
Would it have any bearing on a settlement if I lost my job and my wife kept hers?
Or if the opposite happened, I kept my job but my wife lost hers?

I am worried that if I keep my job and my wife losses her’s, a Judge would simply say her need is now greater so tear up the Deed of Trust & split everything 50/50.

I also worry that the same would be true even if we both lost our jobs as our mortgage affordability’s would be zero or far less.

So any advice you all give will be invaluable to me
Last edit: 08 May 20 by Chevette. Reason: questioned changed

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08 May 20 #512336 by Chevette
Reply from Chevette
Hi ALL,

Can anyone offer any advice on my query?
Has anyone been in a similar situation? how did it pan out for you?

It looks like either or one of us could be redundant very soon.

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09 May 20 #512343 by WYSPECIAL
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If one of you could demonstrate a financial need and the other could afford to pay for a period of retraining or something it might but given the size of the pot you have mentioned in previous posts and the strict need is a one bedroomed place each then it would seem unlikely that spousal maintenance would come into play.

Presumably there would also be the buffer of redundancy pay to help whilst job hunting.

Whether or not it would affect the fairness of your wanting to ring fence some assets is a different matter but you don't know yet if that will be possible even if neither of you loses their job. It could perhaps mean that whilst it is fair for you to ring fence assets a 50:50 split of what is left in the pot isn't seen as fair and your ex will get a greater share of that.

You really need to have an idea of what your ex wants so that you can negotiate around that and decide what you will concede before risking the expense and uncertainty of having the courts decide for you.

It would appear from what you have said though that it is highly unlikely that your ex will agree to you ring fencing a large proportion of assets for yourself and then going for a straight 50:50 split of what you see as the joint assets especially as you earn more.

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11 May 20 #512383 by Chevette
Reply from Chevette
Thanks Wyspecial, I believe my ex is after everything that can get!

what I can't seem to find out is the possible impact of job losses on our settlement.

We have both worked. There is a fair amount of equity in the FMH & buy to let flat. But there is a deed of trust which should give me approx £200k first.

But for instance if my wife does lose her job, is a judge likely to say my Wife would need more liquid cash to afford a new property as she can't currently get a mortgage, and therefore rip up my deed of trust?

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11 May 20 #512386 by WYSPECIAL
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From what you have put in previous posts there is still enough in the pot to buy her a suitable home outright even with the DOT money ring fenced?

If there were a job loss then a claim for Spousal Maintenance may be more of an issue but unlikely to be long term given salaries involved so may be possible to offset with a greater share of the assets.

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11 May 20 #512389 by Chevette
Reply from Chevette
Actually Her share of £167k would buy a 1 bed flat outright, although a solicitor advised me her reasonable need may be a 2 bed flat....Why I don't know, as we have no kids or dependants. if it is a 2 bed flat they are around £250K so she would need a mortgage.

She does have training to do another specialist, self employed job so should be able to earn a living, but it would take time to build up a decent salary. So I hope Spousal Maintenance would come into it.

I just feel it would be a great injustice if the DOT wasn't honoured.

Do you think it would strengthen my case of the DOT being honoured if I was the one made unemployed??....which looks very likely.

I thank you very much for your expertise.

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11 May 20 #512390 by WYSPECIAL
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Chevette wrote: d mediation.
Finances
Pensions
Me- Pot started 1988 worth £650k/ pot accrued during marriage £165k
Her- Pot started 1998 worth £170k/ pot accrued during marriage £110k
So if pension ring fenced I think I will owe her £27,500
FMH equity £420k (4 bed detached house)
Minus a ‘Deed of Trust’ in place to ring fence £210k equity for me. The house was purchased by me with a large deposit before meeting my Wife.
FMH equity after DOT £210k
Buy To Let Flat equity £70K

A two bedroom flat in our area starts at £240k


Equity in FMH after DOT is £210k plus buy to let £70k. That's £280k available just in house equity so if her need is for a two bed flat at £240k then there is still £40k left.

If you were made redundant your DOT alone could house you. Plus presumably there would be redundancy pay to cushion the blow.

The size of the pot takes a of the problems you are envisaging away.

What you need to realise is that 50:50 is a starting point and, for you, an aspiration. If you are able to ring fence a large proportion of the assets then she may well need more than 50% of what is left.

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