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Ask Clare Your Own Question
Clare
Clare, Family Solicitor
Category: Family Law
Satisfied Customers: 34106
Experience:  I have been a solicitor in High Street Practise since 1985 and have specialised in Family Law for the last 10 years
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Clare, My wife and I are separating. We are planning to

Resolved Question:

Hi Clare,
My wife and I are separating. We are planning to sell our family home in the coming months. Approximately 10 years ago my mother gave us £60k to enable us to substantially extend the family home. This was given on the understanding that when mum died £60k should be taken from my share of the inheritance and split equally between my two brothers. I do not know whether mum actually wrote this into her will or whether she has just left it as an understanding between we three sons. My question is whether I can legally ring-fence £60k from the sale of the house for me since it forms part of a future inheritance leaving the remaining proceeds from the sale of the house to be added to our other assets (primarily pension funds) before being split between my wife and I. My wife is expecting a 60:40 split in her favour.
I would be grateful for your advice.
Kind regards
Colin
Submitted: 2 years ago.
Category: Family Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question and for asking for me.
I will do my best to help you but I need some further information first.
How much is the house worth and how much is outstanding on the mortgage?
How long have you lived together and are there any children involved?
Is your mother still alive and does she still have mental capacity?
Clare
Customer: replied 2 years ago.

Hi Clare,

The house has just been valued at 525-535k with an outstanding mortgage of £185k. We bought our current house in 2002 for £295k. We have been living together since 1987. We married in 1990 and have two children who both currently live at home. Their ages are 21 and 18. The youngest is sitting A-levels next month and has secured an apprenticeship which commences in the autumn and the eldest is in full time employment.

My mother is still alive and has her full mental capacity.

Kind regards

Colin

Expert:  Clare replied 2 years ago.
Hi
Will your mother confirm in writing that she requires the return of the money to her estate on her death?
Clare
Customer: replied 2 years ago.

Hi Clare,

Yes, Mum is prepared to state in writing that she requires the return of the money to her estate on her death.

Kind regards

Colin

Expert:  Clare replied 2 years ago.
Hi
What income do you and your ex each have and what pension do you have?
Clare
Customer: replied 2 years ago.

Hi Clare,

My salary is £48k and my ex's salary is £30.6k.

I have three money purchase pensions which are currently worth in the region of £250k and a final salary scheme to which I contributed between 1985 and 1989 and my leaving salary was about £12k (I don't have CEVT for this pension yet).

My ex has £16k in a money purchase pension and has been contributing to a final salary scheme for the past 7 years (and continues to pay into this scheme). I don't know the CEVT.

Kind regards

Colin

Expert:  Clare replied 2 years ago.
HI
What pension division has she requested
Clare
Customer: replied 2 years ago.

Hi Clare,

She has requested a 60:40 split of our total assets (including house equity and pensions).

Kind regards

Colin

Expert:  Clare replied 2 years ago.
Hi
Do you mean she is looking for 60% of the pensions as well- or that the overall settlement would be 60/40?
Clare
Customer: replied 2 years ago.

Hi Clare,

If we realsise £340k in net proceeds from the sale of the house and for the sake of argument lets say that the CEVT of both mine and my ex's pension funds amounts to £350k (a complete quess that the final salary schemes may be in the region of £40k each) and say the realisable value of cars and shares etc is £10k.

Our combined assets would then be £700k. Me ex would be expecting £420k (60% of £700k) which would include say £55k of her own pensions.

I'm not sure (based on the example numbers above) whether she would be expecting to have the entire proceeds from the house and a payment from me to make up the difference since my pension pots are reasonably large. I'm sure this is what she would prefer but I don't know how these splits are normally awarded.

Kind regards

Colin

Expert:  Clare replied 2 years ago.
Hi
Pension assets are not the same as cash assets so that is not how the calculation will be finalised
he claim on your pension funds is for half of the pension that accrued whilst you were married (and vice versa)
On the face of it there is no reason why your ex should not receive just 50% of the equity in the house and other assets.
There are no minor children and she has a reasonable income.
The position with regard to the money from your mother is complicated by the fact that it appears that it was clearly a gift and not a loan HOEVER your mother could seek the return of the money and this can then be factored into the settlement
In fact the £60,000 issues cannot be dealt within the way that you hoped - as a ring fenced inheritance - since it was used in the matrimonial home.
However given the fact that your mother is alive to say that not was not meant as a joint gift is helpful and will support your argument that the division of the property shoudl be 50/50 - withe the argument that if she events 60/40 then you do wish the £60,000 to be ring fenced
You should offer to discuss the matter using Family mediation
Please ask if yo need further details
Clare
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