Should my ex have legal charge put on house?

This is long and somewhat complicated but I need some impartial advice so please bear with me if you think you can help!

My ex husband and I split amicably 6 years ago. I stayed in the family home, we kept the joint mortgage although I have paid it myself (interest only) since then, and we agreed that when our youngest child turns 18, we will sell the house and he will receive 50% of the equity.

I now have a new partner who is about to move in. We are re-mortgaging so that we can release £36K of the £164K equity my ex is owed to him (he has agreed to freeze the equity at this amount, still until our youngest daughter is 18), and my new partner and I hope to stay in the house until that point, when we will either sell or re-mortgage. My ex hasn’t forced the sale now as he wants the kids to stay in the family home.

My ex is, however, in a slightly precarious financial situation - we have had to take out indemnity insurance by the lender in case he goes bankrupt as any financial transactions at undervalue – which this could be viewed as by potential creditors – over the last 5 years can be looked into, although we understand that this leaves us unprotected.

He is certain, however, that he will not go bankrupt, worst case scenario will have to take out an IVA which would mean this house would not be under threat in the same way, so that’s not an immediate concern.

My new partner and I are going to go into our new mortgage as tenants in common as I have children from my first marriage and want to protect their interests and my equity share in the event of our separation / my death, but any equity we make from now on will be split 50/50.

My question is this – We will need to document with our solicitor what my equity share currently is - so as I see it (I may be wrong here!) we have three options –
1)My ex has a legal ‘charge’ put on the property to protect his equity share – but what would the implications of this be if he became insolvent?
2) We say that all the current equity will go to me, and my ex and I have a non legal document stating what I owe him – but this could look like my ex has ‘gifted’ me a large share of his equity
3) We say the equity will be split 50/50 and have a non-legal document drafted between me, my new and ex partners establishing who is owed how much equity?
I don’t wish to be duplicitous in any way but I also don’t want to pay over the odds for a legal charge and /or have our amicable relationship and my ex’s goodwill misinterpreted as an attempt to conceal money at some point down the line – please help!!

To say the least, I don't completely understand what is going on here.

It is not uncommon for the marital home to be transferred to the wife, on the understanding that, at some time in the future ( usually where the youngest child reaches majority ) the property will be sold and the husband at that stage gets his delayed share of the equity.

From the point of view of the ousted husband, what usually happens is that he has to rent ; he can't get a mortgage ( even if he could afford it ) because he remains liable on the mortgage on the former family home.

I don't doubt that, in a situation likeI have described, many ex wives will keep their part of the bargain and sell the property at the time when the order says they should.

But there are perhaps some who would not, and the question then arises as to how the displaced husband can force a sale and realise his share. If he's not the owner. The only way is a formal legal charge and there is just no way round that. This document should, amongst other things, prevent the wife from taking out another mortgage which has priority to his own legal charge.

You realise I'm talking generally here. If i have interpreted what you say correctly, you and your partner want to re-mortgage to pay the ex off. To me, that seems reasonable, and you're doing the honourable thing, and your ex will get his share earlier rather than later.

But please be clear that if your ex husband comes into a large sum of money, his creditors will almost certainly apply for a ' third party liability order ' which in plain English means that you would have to pay his share, or some of it, to the creditors and not to him.

The same almost certainly applies to the trustee in bankruptcy.( on the assumption, that is, that your ex does go bankrupt, which you say he won't ).

But it's perfectly possible and legal for the Court to make an order that your ex transfers his interest in the family home to you ( or to you and your new partner ) and you pay him a lump sum equal to his agreed equity in the property. That means that your ex has been paid his share and he has no
interest which he needs to protect, hence no legal charge is
needed.

Let me ask you this. If I have interpreted this correctly, you and your new partner want to pay your ex his share in the former marital home.

This could be achieved by your asking the Court to make a Consent Order, which would involve

(a) a provision that your ex transfers his interest in the property to you ( and/or your new partner )
(b) you ( and your new partner ) pay him a lump sum for his agreed share.
(c) It is most important that the two transactions ( the transfer and the payment of the money ) take place at the same time.
(d) That means your ex has received his entitlement and therefore
he does not need a legal charge. But, as I have said, his creditors
could and almost certainly would make a claim against his share of the proceeds.

The Court order business is to make sure that it is legally binding. One doubt I have is that your partner is not a party to the divorce proceedings and I'm not sure if it would be within the power of the Court .

But I must draw your attention to the words of the disclaimer which are printed below. I am suggesting a possible way out, but it is
absolutely essential you take advice from someone qualified to give it.

LMM