Separation and assets

[timmykent]

Currently going through a seperation process following my ex-wifes affair (which continues). I would describe the situation as unamicable. We are currently engaging with a mediator to decide who is going with what.

My situation: early 40's on €70,000 gross pa. I also own land which I farm, and I would value it at €600,000. I have paid and continue to pay all bills and cover the full mortgage.

Her situation: early 40's home maker. In the past, she ran her own cash business from the house; modest source of income but welcome none the less. This ceased c. 2 years ago, however, she now has asperations to begin a new work-from-home venture.

Joint mortgage: House value roughly €400,000 with 25 years remaining on an outstanding mortgage principal of €150,000. House built on the farm.

Two young dependents. We are all living together at present.

Neither of us can afford to buy each other out of the house. She has a preference to stay in the family home. I am prepared,
1. to guarantee the house to her in exchange for the farm and pensions/ investments.
2. offer a lump sum (€50,000 to € 60,000 family member loan) to reduce the mortgage principal to a more manageable amount (both 1 and 2 above equates to an approx asset split of 33% her and 66% me).
3. Health insurance for the kids
4. Provide a level of child maintenance for the required period and the usual 50% extra curricular etc

She is determined to pursue her new businees venture in the home. I think the timing is bad and down right selfish to be quite honest. I want her to seek some level of part-time employment (the fact that we dont have child care expenses is huge and appreciated) to supplement her situation. She is young with multiple qualifications. She will receive various social welfare supports such as one parent family and working family. She is not prepared to make any contribution to the mortgage until her situation improves, while all the time, mine disimproves. The mediator seems sympathetic to her plight. He has told me and her that she holds all the cards here (even in court if it came to this) and I will, as long as she continues to play the poor mouth, have to continue paying the full mortgage indefinitely. I want to break out of the mortgage asap but I don't think the bank will allow me to be removed as she has no capacity right now to take the mortgage on in her own right (certainly if she is not working). Selling land to write down the mortgage is not an option - the physical layout of the farm would mean that I sell it all. She doesn't what this either as the house smack bang in the middle of the farm.

My plan is to move in with my parents soon and to ultimately renovate an old farm building to provide myself with reasonable and independent accommodation for myself and children when they visit. I will need to considered as a fresh start applicant for this to happen. I dont think i will be. I feel I'm being held hostage to her aspirations. HELP!!!

 

[Mommabearof3]

Sorry to hear of the situation you find yourself in just a few of my thoughts I definitely would not move out unless the situation is hostile and detrimental to the children’s or your own health. I think it is the only leverage you hold to try and get a resolution otherwise if your ex wife is stubborn and not interested in resolving this then it will drag on for years given the children’s ages.

I personally think what you are suggesting is not unreasonable but it will require agreement and realistically even if she were to take up employment of some sort it would be sometime before you could get any type of mortgage in her own name. Is there any possibility that her family might help her out with some type of financial arrangement in terms of a loan or something?

I would not imagine any welfare payments she will be untitled to could be factored into any long term financial planning. Is she eager to resolve this? I cant see any reason why she would accept less than half of the value of the equity. Do you get any income from the farm? I would imagine it will come down to a question of figures and would be beneficial for you to try and come to a financial separation. That may mean you may have to find more cash somewhere but in the long run maybe it will benefit you more. Tough place to find yourself if wishing you all the best hopefully you can work this out.

 

[Brendan Burgess]

I also own land which I farm, 45 acres, and I would value at €600,000.

House value roughly €400,000 with 25 years remaining on an outstanding mortgage principal of €150,000. House built the farm.

You can't have everything.

It seems clear to me that you need to sell the house and the farm - assuming they must be sold together.

You will have €850k which will be enough to buy you both your own houses mortgage-free.

Brendan

 

[Purple]

I agree with Brendan but I also agree strongly with @Mommabearof3 that you should not move out. That is the only real leverage that you have.
Remember that while she may say that she has sacrificed her career to look after the children you have sacrificed time with your children to provide for their material needs. Both points are valid. It’s not unreasonable for you to say that she must contribute financially so that you get to share more in the privilege of raising your children.

 

[timmykent]

You can't have everything.

It seems clear to me that you need to sell the house and the farm - assuming they must be sold together.

You will have €850k which will be enough to buy you both your own houses mortgage-free.

Brendan

Totally agree. Believe me, cedeing the family home where I have long established connections is very hard, but i am prepared to do it, plus a lump sum to lessen the burden. Therefore, I can't really say that I'm looking for everything.

I think a full sale of all assets would be a last resort. Judge may perfer that the mother and children are let stay in the home for a period. The farm is turning a profit in most years, and drawings are used for various material needs of the family. Not necessarily €850K after CGT, which will be large on the farm asset. Plus, we would be both competing with each other in a limited housing market.

 

[timmykent]

I think it is the only leverage you hold to try and get a resolution otherwise if your ex wife is stubborn and not interested in resolving this then it will drag on for years given the children’s ages.

This is my worry. She's knows she has a strong hand here. The risk is far greater for me. She, at one point, was insisting that the mortgage be paid off for her. I'm seriously weakened by her current financial status. If she wants to be unencumbered with a mortgage, she could just sell, and using the lump sum, pay off remaining principal and taxes, and use the equity to purchase her own property in the local town. She's not agreeable to this.

 

[Bronte]

This is my worry. She's knows she has a strong hand here. The risk is far greater for me. She, at one point, was insisting that the mortgage be paid off for her. I'm seriously weakened by her current financial status. If she wants to be unencumbered with a mortgage, she could just sell, and using the lump sum, pay off remaining principal and taxes, and use the equity to purchase her own property in the local town. She's not agreeable to this.

She's holding all the cards and knows it.

Assets
Farm 600K
House 250K (minus mortgage)
Pension ?
Investments?

Offer to her

House 250K
Cash 50K
Debt 150K
Child Maintenance

Now just look at that. Think about what a judge would order. And she's zero income, no wonder she's going to start a nonsense business.

What split has the mediator suggested. What does your wife want?

My best advice to you is to settle amicable. And this is going to cost you. But a lot less than going to court. You are a wealthy man and there is no way you're going to be able to not pay.

STAY AWAY FROM THE COURTS.

You moving into another property nearby is excellent. But not yet. Any possibility of violence as regards the other man.

 

[timmykent]

Offer to her

House 250K
Cash 50K
Debt 150K
Child Maintenance

I suppose the cash lump sum of 50k will reduce the outstanding debt on mortgage to 100k but yes point taken...I am giving her debt (and no spousal maintenance) but my argument is the potential equity available to her.

I will also be burdened with a debt of 120-150k should I manage to secure a 2nd mortgage. I'm struggling with this whole concept of what is 'proper provision'. Surely it doesn't mean that one must be completely unencumbered at the expense of the other?

What split has the mediator suggested. What does your wife want?

Mediator: me to move out. The living environment is not good for all. Continue to pay mortgage in full for a minimum 2 to 3 years, (and understandably maintenance plus 50% extra curricular, medical etc) to allow her time to establish herself, and re-examine the situation at this stage. Understandably, given the circumstances of the marraige break up, trust is non existent.

Ex-wife is pushing to remain in the house and for full mortgage pay out (either in lumps sums or continue with monthly payments). I have good reason to believe there to be is alot of back ground noise too from one particular in-law with regard to this. There is the expectation of property inheritance due to her but this particular individual always held the attitude 'she (my ex wife) already has a house'.

Any possibility of violence as regards the other man.

No, not by me on him and vis versa, but curious to know why might this be relevant?

 

[Bronte]

Violence is relevant in many contexts. You to her and vice versa. And you to the OM. Or Vice versa. These situations can be very hot. I personally know of a recent case where wife alleged violence, where there was none, and his lawyers wanted him to agree (sign something) in return for her dropping it legally. He refused and ignored legal advice as he had done nothing wrong. He was correct not to sign anything, as then he'd have been shooting himself in the foot, but he did have to move out. Separately she dropped the falsities.

In a farming context it would be particularly relevant where the 'home' is build on the man's family land. You need to remain calm at all costs and especially in the case of provocation. If staying there is not good for anyone, well then what is the point in staying unless it's legally advisable. So I bow to the superior advice of the mediator who knows the situation.

At the end of the day I am all for children to have a proper atmosphere. This is a money website, but in some cases, divorce, there is a lot of other factors at play.

 

[Bronte]

If you are willing to pay the mortgage for 2/3 years, and pay spousal maintenance, plus children (plus 50/50 extra curriculur, where does the mediator see the wife paying for the mortgage in 3 years etc?

You say she is qualified, so she can earn. But will she. Perhaps, to take the heat out of this, you move out and pay as suggested, giving she and you time to breath, see if you can live with each other in the same location, with you paying and with your utmost goodwill maybe she will see her way to earning. So a 2/3 year settlement now, and go back in the three years when you both have your new lives in place.

This way no assets are lost, no legal costs down the open swamp, peace is restored, you both have your dignity, the children have a proper relationship with both of you. Time has moved on, the more time you buy yourself, getting the kids to the magical over 18 will work in your favour.

You did get married, you are a lucky man, you have land and a job, children. You won't force her, you'll have to be bigger. She has no assets or job. (I am not taking away from what she has done) but if you don't think of this from her side and if you only focus on wrong doing and on holding on, you will lose in the long run.

You mention other inheritances, forget about it, in my case above a sizeable inheritance came, and was frippered away so it wouldn't be an asset by the time the court ruled. By that stage the court cares not, money gone, you are in court with what is on the table at that moment in time.

BTW as regards the family loan of 50K, I've yet to meet a farmer of even unsubstantial land that didn't have money in the bank.

 

[Mommabearof3]

I would try to encourage her to see that if you can agree a way to get her the family home now it would be in her interests. Pushing it down the road until the children are older will mean eventually she has to sell and fair enough she will get half but then has to find somewhere to live.

Unfortunately it does appear that she holds more sway in terms of being the primary caregiver but I think you need to preserve your own mental health by not getting sucked into a more acrimonious state than already exists. Without a doubt negotiating out of this would be better for all but I think if there was a way of raising funds to give her the house and then financially cut off from her would benefit you more in the long run. That also assumes she is open to that. Would she accept the mortgage paid and ownership of the house in lieu of maintenance? Could you raise that kind of capital as a loan? Would that put you beyond affording anywhere to live yourself?

One way or another you both have to live somewhere and hopefully with as little disruption to your children as possible. Maybe Brendan is correct you cant afford to keep the house and land but my fear would be that you ex wife will not agree to that insisting on staying in the family home until the children finish their education which may be until they are 23. What then? You are left in limbo financially and also unable to move forward with your life. Negotiation and compromise is the best course of action here and perhaps you may have to accept the sale of everything to start afresh again thats assuming your ex is in agreement. Hard pill to swallow on top of everything but this is a problem that is not going away and has to be resolved now or kicked down the road. People do survive separation and divorce and hopefully you can maintain some degree of civility but I would emphasise self care and taking support where you can to try to come out of this emotionally intact.

 

[timmykent]

getting the kids to the magical over 18 will work in your favour.

Sorry, I'm sure what you mean here @Bronte . Why over the age of 18?

 

[timmykent]

You say she is qualified, so she can earn. But will she.

Yes she's qualified to level 8 but never gained employment in that area in which she qualified. She always claimed she needed level 9 but I never believed that to be the case.

 

[timmykent]

Would she accept the mortgage paid and ownership of the house in lieu of maintenance? Could you raise that kind of capital as a loan? Would that put you beyond affording anywhere to live yourself?

Thanks @Mommabearof3 . Doubt if I could renage on maintenance. In any case, I wouldn't. I've a duty to my children.

Exploring the possibility of remortgaging. I'm never going to clear the full mortgage and have enough capital to renovate. People have mentioned vacant property grants.

 

[Mommabearof3]

Definitely do not mean reneging I mean in terms of agreed negotiation ie you would have to find 150k somewhere and the house could be entirely hers mortgage free?

 

[Bronte]

Sorry, I'm sure what you mean here @Bronte . Why over the age of 18?

Well the closer you are to children being independent adults the less likely the courts will award your wife assets, particularly if she's never been working. The days of being a SAHM is of a different generation. There's no justification for a mother to stay at home after children go to school (I mean full time school).

(Obviously in a case where a husband and wife agree that she stays at home forever that's a different scenario).

So in your case Tim if you pay the mortgage, all bills, all child care, and her only contribution is being a mother, not working side by side with you on the farm, then she's going to have less leverage at 18 (23 in full time education) later to demand full ownership of the house and other assets. Especially if the farm is an asset prior to marriage.

All I'm saying is of course always down to the whim of the judge on the day in court. And I assume the mediator knows what he/she is at, so unless you think otherwise I'd be trying to get out of this situation with that help as best you can and leave the she did/he did out of it.

Right now if you go to court, which I do not advice, you may get ordered to sign the house over to her and assets too. Has the mediator told you some of this.

I would sincerely advice you to pay good money for a top solicitor for one hour to explain the law on this to you, particularly the likely legal outcome. My sibling met many lawyers on the way and told me the half hour one male solicitor spent on him was the best advice given thru the tortuous procedure. Right down to the solicitor saying at the end of this process you will hate all lawyers including the one speaking.

By any chance are you in the UK, if yes than I'm not talking about the UK.

 

[Brendan Burgess]

the half hour one male solicitor spent on him was the best advice given thru the tortuous procedure. Right down to the solicitor saying at the end of this process you will hate all lawyers including the one speaking.

A great line!

 

[Dr Strangelove]

My situation: early 40's on €70,000 gross pa. I also own land which I farm, and I would value it at €600,000.

You have a full-time job and a lot of wealth in the form of farmland.

I suspect farming gives you a very low return on your wealth compared to alternatives.

It’s also a lot of wealth in and of itself.

I realise this is taboo for farmers but sale of some or all of the land would mean very few hard choices for anyone.

 

[timmykent]

Thanks for your replies all. It is appreciated.

Given remaining mortgage and ex wifes current earning capacity, I dont think our bank will allow me to be removed from the mortgage. Im thinking hard here. What is the prospect of me getting a 2nd mortgage? There is 150k on the existing mortgage. Can the following be done:

Me acquiring a mortgage/ loan myself of say €150,000. Use €50,000 of this loan to reduce mortgage principal on existing home. This will reduce the mortgage payment from €170-180 pw to €120pw. Split this and ex wife pays for her half and I pay the remaing half. As part if the settlement, she will be guaranteed the house.

I then use the the remaining €100,000 of the €150,000 (which I'm fully accountable for) from this second mortgage/ loan renovate an old farm structure to meet my iwn accommodation needs. Of course €100,000 wouldn't go very far, but there is of course the vacant property refurbishment grant, and this structure is derelict. I understand that the grant is only paid out on completion of works.

Am I dreaming or is this a possibility for me. As I said above, I'm earning €70,000 and this will increase. Will the farmland asset strengthen my hand he if looking for a 2nd mortgage?

 

[Bronte]

I think you should sort out the mess before even thinking of borrowing more money. And yes there is a problem with the Vacant Grants because you only get the money at the end. So only people with money can do them. Also the procedure is onerous.