Family Home Ownership during marriage breakdown / separation

Flybytheseat

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My wife and I have decided to separate and divorce. We are a single income family in a good position financially and are very lucky in that regard. Having worked for a couple of years at the start of the marriage and when our first child was born my wife gave up work to care for the 2nd and 3rd child. She returned to work for a couple of years on a part time basis between the second and third child and stopped fully when pregnant with the 3rd. All are now teenagers/students from 14 (nearly 15) to 19. We both hope they will stay in full time education until 22/23. My wife currently does not work.

I purchased the family home a year before we were married and paid 66% of the purchase price in cash. The small mortgage was paid off then in the subsequent three years using savings I had from before we were married and rental income directly derived from the house (we were living abroad at the time so the house in Ireland was rented out). The deed of the house is in my name only as was the mortgage. My wife never contributed to the mortgage nor was any income I earned since getting married used to pay the mortgage (only the rental income from the house itself).

We are hoping for a quick an non-confrontational divorce using the mediation route. I have provided my wife with a full list of the current value of all of our assets including pensions. We have approximately €2M in assets between us. I proposed a split/division of all assets that we acquired during the marriage 50/50 including all pensions. I am also proposing child maintenance payments for the 3 children until they turn 23 from €400PW when all 3 are under 23 down to €250PW when only 1 is under 23. My gross annual salary without bonus and OTE is approx. €144K.

For the family home I am proposing and 80/20 split in my favour when listing out assets for division though my ultimate plan is to transfer the family home to my wife's name in full in the separation agreement in return for a Pension Adjustment Order of 0. That way she can own the home outright and act as primary carer which is what she wants. We are also planning to set up and education fund/trust for the 3 kids from some of the jointly owned investments which will be jointly manged by both parties. The end result is a split of €1.15M for me (mostly in pensions), €700K for my wife, €20K for separation/divorce costs and a kids education fund of €70K.

I think that the above arrangement is fair to both parties and allows us both to live comfortably after the split as long as my wife returns to work. By my calculations if she can earn €35K-€40K per annum gross everyone's current living standard will be maintained.

My wife has reviewed this proposal and I think is happy with most of it with the exception of the proposed 80/20 split for the family home. From a brief chat with her solicitor she was told that because its the family home she has an absolute right to 50%. Is this the case ? Am I being unfair ? If it is it means every asset I've ever owned and every penny I've earned since I started working well before we were married is now to be divided equally with my wife which doesn't sound very fair and equitable to me.
 
I think that the above arrangement is fair to both parties and allows us both to live comfortably after the split as long as my wife returns to work. By my calculations if she can earn €35K-€40K per annum gross everyone's current living standard will be maintained.

If she has not been in the workforce for 14 years, the idea that she might earn €35k in any kind of medium term strikes me as completely unrealistic.
 
If she has not been in the workforce for 14 years, the idea that she might earn €35k in any kind of medium term strikes me as completely unrealistic.

Not really. Average full-time wages are €49k.

Many professions (eg teaching, accountancy, most healthcare) could pay something in that region for someone returning after a long period out.
 
I think with a masters degree in Business and accountancy qualification in addition to other adult education diplomas all of which I funded i beg to differ. Not to mention 15 years professional experience. All she needs is the average industrial wage.
 
Don't get side tracked by the salary issue.

The split of the assets is the key point.

From discussing this over the years, there don't appear to be any guidelines.

You either agree something or else you pay thousands in legal fees to have a judge decide it for you.

The end result is a split of €1.15M for me (mostly in pensions), €700K for my wife, €20K for separation/divorce costs and a kids education fund of €70K.

You might as well reconcile yourself to a 50/50 split. Or else you will give €300k to the legal profession and split the remainder 50/50 anyway.

€1.15m in a pension fund is not the same as €1.15m in cash. You will be taxed on the pension fund when you pay it to yourself.

If she is staying in the house, then why would you own 80% of it.

You might well resolve it in mediation. But I think your objective should be half of everything including the pension and then if you want to swap some house equity for the pension, fine.

See what happens in mediation. Then listen to your solicitor but don't be afraid to get a second opinion, as long as you don't shop around until you find someone prepared to tell you what you want to hear.

Brendan
 
Thanks Brendan.

€1.15m in a pension fund is not the same as €1.15m in cash. You will be taxed on the pension fund when you pay it to yourself.
I've considered this in the asset listing and listed out the tax liability as a negative asset.

If she is staying in the house, then why would you own 80% of it.
Under my proposal after the asset swap she would own 100% of the house.
 
For the family home I am proposing and 80/20 split in my favour when listing out assets for division though my ultimate plan is to transfer the family home to my wife's name in full in the separation agreement in return for a Pension Adjustment Order of 0.

Be careful about this. If you initially propose an 80/20 split but she gets to stay in the house and gets half your pension, she might well go for it.

Be careful of what you offer. Maybe structure a few different offers.

Brendan
 
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