Discovered on Boxing Day that Husband had been having affair, he moved out that day and has no intention of coming back so I have just started divorce proceedings.
He has personal debts of £24k and wants equity from the house. He has agreed to my brother paying him £28k for his share (equity in house is £150k) but my brother will only be able to contribute £100 towards the outstanding mortgage. I am happy with this arrangement as it secures mine and the childrens future and as he has no dependents (and little likelihood of every getting any) will be leaving his share to my children anyway.
When H is released from the mortgage he has agreed to pay me £500 pm for our two children (aged 10 and 6). I will be able to meet the mortgage payments and all the bills from my salary and the maintenance payment.
What I need help with is do we then take out life assurance on myself and my brother to cover the mortgage (which would by then be in our names), or should I keep the joint policy I currently have with H? If anything happened to H and his maintenance stopped I would not be able to afford mortgage which makes me think I should continue the joint policy BUT if I was to die would the payout go to the mortgage company or my (ex)H as joint policy holder? I don't want him to be able to pocket the money and my brother left with a mortgage he couldnt afford.
I have just taken out the very thing you speak of! Mine is more straight-forward as it is in my sole name, however I had the same concerns as you.
I had a very good financial advisor (something I would advise to seriously consider in your current circumstances - is there anyone you feel you have trust in? If you would like details just send me a private message). I can see your dilemma, my policy automatically pays out if something happens to me, the mortgage has to be paid off before any money is paid out and then the money goes to your estate.
It is vital to make a will to state what you want to happen to your assets/estate. The policy if it is the standard term assurance will pay off the mortgage only, therefore it would seem to me that it will be wise to have it in the names of the people on the mortgage. (You and your brother?).
Your ex is responsible for his part in ensuring the children are financially taken care of if anything happens to him, if you take out the policy with him included you may as well still be married! You will be taking care of his responsibility!
Hope I have answered your query, let me know if I have missed a point!?