Mortgage advice for a blended family

[mod]

Hello,

I need a little advice from anyone who is in a similar situation please.

I'm getting married to my partner of 6 years in 2020.

She owns a three bed place in Brighton and has three kids (12, 14 and 20). The eldest doesn't live with her anymore. I spend half my time at hers in Brighton with my daughter. Its practically our home too.

I own 50% of a flat in London and have a young daughter from a previous relationship who I have custody of 10 nights a month.

The logical thing to do would be to sell my place and put all my equity into my partners house meaning we'd have a tiny mortgage. Or use me money to extend the loft ect.

My concerns are these.

What's happens to my daughters inheritance (that was the equity from my place) should I snuff it early in a car crash? My partners kids could live in there family home until they are in their 80s!

What happens to my investment into my partners house should we split up? How would I ever get that back?It would be a substantial amount a cash to find.

cynical things to think about I know but things that are on my mind.

 

[Supine]

You need to decide what is fair for you and your partner. Then talk to your partner to see if they agree. The lawyers can then formalise the agreement in the house(s) deeds.

 

[Mrs Miggins]

Definitely not cynical but rather very, very sensible. Seek legal advice. You will need to agree these thing between you. Good luck.

 

[tommers]

My dad moved into his wife's house, that she shared with her sister, and then he added to the mortgage on his house to build an extension that they lived in.

When he knew he was ill he spoke to them and agreed a percentage of the house value that his money was responsible for and that was written into a legal agreement. So that when the house is sold me and my brother get a portion of the value. The condition is obviously we can't sell the house without their agreement and they have the right to live there as long as they want. Which is fine by us. That is also specified in the agreement.

So you would need to sort that out with them and make sure that both parties are safeguarded. You never know what will happen in the future. It's not an unreasonable thing to worry about and it's usually better to get things clear and agreed.

 

[Athos]

Hello,

I need a little advice from anyone who is in a similar situation please.

I'm getting married to my partner of 6 years in 2020.

She owns a three bed place in Brighton and has three kids (12, 14 and 20). The eldest doesn't live with her anymore. I spend half my time at hers in Brighton with my daughter. Its practically our home too.

I own 50% of a flat in London and have a young daughter from a previous relationship who I have custody of 10 nights a month.

The logical thing to do would be to sell my place and put all my equity into my partners house meaning we'd have a tiny mortgage. Or use me money to extend the loft ect.

My concerns are these.

What's happens to my daughters inheritance (that was the equity from my place) should I snuff it early in a car crash? My partners kids could live in there family home until they are in their 80s!

What happens to my investment into my partners house should we split up? How would I ever get that back?It would be a substantial amount a cash to find.

cynical things to thing about I know but things that are on my mind.

It's a common situation, and one that can be provided for quite easily. Effectively, you and your partner would jointly own what's currently her home as 'tenants in common', in defined proportions. If you died (with a suitably drafted will), your executors could force the sale and your share of the proceeds go to your daughter (similarly, if you spilt up, either partner could force the sale). In reality, if you'd be the minority owner, your mrs would buy your share* from your estate (if you died), or buy you out (if your spilt).

ETA Easy if you have life insurance which pays out to her.

 

[cybershot]

Talk to your fiancée first. Agree between you and get it formalised by a solicitor.

If you’re worried about how your fiancé may take it defiantly don’t say you’ve seeked legal advice before speaking to her.

 

[Miss-Shelf]

It's tricky. Because if you die very unexpectedly early eg next year do you really want to be forcing a sale on your bereaved wife? What if your bereaved wife remarried and had more children? (Or vice versa? This is something a solicitor raised with me)

What is it that you want for your daughter and your wife in the event of your bereavement?

Security of housing for your wife? Money for your daughter -immediately available(via trust with her mum or someone else) or (in trust with her mum )for her at 18 ? Demonstrating a sense of care for your daughter after you're gone?

When I was looking at a sort of similar situation (my daughter was much older) I partially solved it (advice from solicitor and financial adviser) by taking out quite a hefty life insurance for a 10 year span. ETA it was in trust with my sister for her. I had separate life insurance for my share of the mortgage. That way, my daughter would have got much more £ than any share of equity in the new joint owned property and my then partner would not have had to sell or raise cash.

It helped me to think that there is not one solution that applies now until my death in older age. Thinking of it in 5 and 10 year periods of time helped me think about the outcome I wanted if I died next week. With the knowledge I would change and update my will after 5 or so years as circumstances change (which I have done)

 

[Johnny Doe]

It's tricky. Because if you die very unexpectedly early eg next year do you really want to be forcing a sale on your bereaved wife? What if your bereaved wife remarried and had more children? (Or vice versa? This is something a solicitor raised with me)

What is it that you want for your daughter and your wife in the event of your bereavement?

Security of housing for your wife? Money for your daughter -immediately available(via trust with her mum or someone else) or (in trust with her mum )for her at 18 ? Demonstrating a sense of care for your daughter after you're gone?

When I was looking at a sort of similar situation (my daughter was much older) I partially solved it (advice from solicitor and financial adviser) by taking out quite a hefty life insurance for a 10 year span. That way, my daughter would have got much more £ than any share of equity in the new joint owned property and my then partner would not have had to sell or raise cash.

It helped me to think that there is not one solution that applies now until my death in older age. Thinking of it in 5 and 10 year periods of time helped me think about the outcome I wanted if I died next week. With the knowledge I would change and update my will after 5 or so years as circumstances change (which I have done)

That's very good advice, or least at a quick view.

 

[AnnO'Neemus]

You need a prenuptial (or 'postnuptial') agreement that sets out who owns what amount of equity in the property and what's to be done in the event of break up, or the death of either or both parties.

You also need to draw up wills. Because when you marry it voids any previous will because now your spouse is legally entitled to an inheritance. There are rules about dividing up an estate between spouse and children, set proportions, although you can vary those in a will, should you so choose. You need to have a discussion about it all. I'm sure she'd want to ensure that her share of the property went to her children too.

It's a very sensible precaution, because if, god forbid, either or both of you died in an accident or through serious illness, and died intestate, it would leave a terrible mess for your surviving family to sort out, especially if it might be contentious as to who gets what because of different contributions and different amounts of equity in the property (and other assets).

You need to have a chat and then see a solicitor to draw up a pre/postnuptial legal agreement and a will. It's not very romantic, while you're planning a wedding, but it is a necessity.

 

[mauvais]

Prenups aren't binding in the UK, although they might be considered. For that to be the case, both parties would have had to have received legal advice.

With or without one, any divorce settlement still ought to be based on the details - who needs what, who has contributed what (monetarily or otherwise) and what is overall a reasonable outcome.

You might want to explore what's a likely natural outcome of that before trying to turn your forthcoming marriage into a transaction or contract law lecture.

 

[mod]

Thanks for all the replies.

Of course I've spoken to my missus about all this. Extensively!

The other option is putting my money into a 1 bed place here in Brighton with a small mortgage. My daughters future is secured. I'd have somewhere to live in the event of us separating or I'd have an income to use as a pension* (from the rent of the flat) when I stop working.

* I don't have a pension (at the moment)

 

[mauvais]

I would suggest that property is a much worse security than some form of easily realised asset. You don't know what anyone's housing needs are going to be in future, neither your daughters nor your own, and so attempting to second guess and provide for that is probably more problematic than helpful. That and landlordism is a social ill that should be discouraged.

I'd also add, and perhaps I shouldn't, that maintaining a property as a fallback option in the event your marriage should fail really doesn't say anything good about your marriage to begin with. By this I don't mean that you have a tangible problem as such, but that perhaps your thinking is not quite where it should be.

 

[Miss-Shelf]

I would suggest that property is a much worse security than some form of easily realised asset. You don't know what anyone's housing needs are going to be in future, neither your daughters nor your own, and so attempting to second guess and provide for that is probably more problematic than helpful. That and landlordism is a social ill that should be discouraged.

I'd also add, and perhaps I shouldn't, that maintaining a property as a fallback option in the event your marriage should fail really doesn't say anything good about your marriage to begin with. By this I don't mean that you have a tangible problem as such, but that perhaps your thinking is not quite where it should be.

no one goes into a marriage planning to get out of it [well maybe some do] but it's realistic to accept there's a possibility that any partnership can become separated despite anyone's desires or efforts and that thinking about the effect of that on your offspring is not such a bad idea

 

[mauvais]

no one goes into a marriage planning to get out of it [well maybe some do] but it's realistic to accept there's a possibility that any partnership can become separated despite anyone's desires or efforts and that thinking about the effect of that on your offspring is not such a bad idea

Sure. But continually retaining a tangible backup strategy/exit plan is a little more developed than 'what if' contingency planning.

 

[mod]

Sure. But continually retaining a tangible backup strategy/exit plan is a little more developed than 'what if' contingency planning.

My daughters inheritance would be easier for her to access and cause less issues if it were invested in another property. Or the income from rent could act as my pension.

But yes, thirdly, it would be reassuring to have another place (near my daughter) in case my relationship / marriage doesn’t work out.

But my preference would be to invest in my partners place to make more space so our future together as a family is as comfortable as possible. Just wanna make sure my daughters future financial security isn’t being put in jeopardy by making such a decision.

There’s nothing wrong with exploring all options and hearing people’s experiences.

Who knows what life can bring!

 

[mauvais]

If I learnt one way or another - including being told by them - that my partner was keeping a property on the basis that our relationship might not last, I think they'd be needing it sooner rather than later. It's beyond good planning and well into a lack of faith. What if anything are you trying to achieve by getting married?

I understand why it might make matters of estate easier for you but inheriting property that you don't directly want is a PITA. You have the stress of disposing of a house whilst dealing with everything else that goes with bereavement.

If you can set aside money, consider a trust or similar vehicle. Decide what your daughter's future needs might be (e.g. house deposit) and think about at what point inheritance may be useful. It might well be while you're alive. If you can't set money specifically aside, you've already had good advice about wills & inheritance that needs to be explored further with a solicitor.

As for rent as a pension, get a pension. As well as the ethical element, BTL is higher risk than many people identify.

 

[mod]

I'd also add, and perhaps I shouldn't, that maintaining a property as a fallback option in the event your marriage should fail really doesn't say anything good about your marriage to begin with. By this I don't mean that you have a tangible problem as such, but that perhaps your thinking is not quite where it should be.

I haven’t made a decision and have a few options but I certainly don’t require any unsolicited advice or questions about my motives for getting married. Thanks for your advice aside from that though.

 

[Wolveryeti]

What's happens to my daughters inheritance (that was the equity from my place) should I snuff it early in a car crash? My partners kids could live in there family home until they are in their 80s!

What happens to my investment into my partners house should we split up? How would I ever get that back?It would be a substantial amount a cash to find.

cynical things to think about I know but things that are on my mind.

If you are joint tenants, then the property would pass to your spouse on your death automatically. You could get a lawyer/conveyancer to draw up a new deed of trust that would make you and your spouse 'tenants in common' allowing you to leave your share of the house to your daughter.

W.r.t divorce there isnt really a way of protecting your wealth if things go sour with your intended. English law looks at need of spouse and children involved (and can and will disregard 'pre-nups')... I assess the most favourable outcome would be sale of the matrimonial home and division of assets once the youngest is 18. There are complicated things which you could do with trusts but tbh not worth it if the only asset is a house.

 

[sheothebudworths]

While I think it's completely correct and sensible to be considering how this move could effect all of your children and each other in the future, BTL is completely unethical, however you frame it.
That looks to me to be mauvais starting point and he's right, imo.
There are other sound options - and there have been several suggestions already about what they might look like - so explore those.

 

[sheothebudworths]

It's a common situation, and one that can be provided for quite easily. Effectively, you and your partner would jointly own what's currently her home as 'tenants in common', in defined proportions. If you died (with a suitably drafted will), your executors could force the sale and your share of the proceeds go to your daughter (similarly, if you spilt up, either partner could force the sale). In reality, if you'd be the minority owner, your mrs would buy your share* from your estate (if you died), or buy you out (if your spilt).

ETA Easy if you have life insurance which pays out to her.

How easily is this adapted to cover all the eventualities listed here?
Splitting up - but also if either (or both) of them died sooner rather than later, in a worst case scenario (take your point about life insurance covering that - and payments for that could easily be covered by the reduction in mortgage payments, presumably?) and then spreading the invested share between all of their children, but without turfing anyone immediately out of their existing home - how would that work?

 

[Athos]

How easily is this adapted to cover all the eventualities listed here?
Splitting up - but also if either (or both) of them died sooner rather than later, in a worst case scenario (take your point about life insurance covering that - and payments for that could easily be covered by the reduction in mortgage payments, presumably?) and then spreading the invested share between all of their children, but without turfing anyone immediately out of their existing home - how would that work?

You could use a trust to, for intstance, say tht the sale will be postponed until the youngest child reaches a particular age.

 

[mod]

While I think it's completely correct and sensible to be considering how this move could effect all of your children and each other in the future, BTL is completely unethical, however you frame it.
That looks to me to be mauvais starting point and he's right, imo.
There are other sound options - and there have been several suggestions already about what they might look like - so explore those.

the ethics of BTL are unethical I agree and I’m happy to debate that but that wasn’t their initial point was it?

Yep I’ve had some great advice on here which gives me a lot to think about. Thanks.

 

[sheothebudworths]

Truthfully, I think all of his comments were worth hearing and thinking about, without getting defensive.
Doesn't mean that anyone responding doesn't get the dilemma, tbf - it sounds like one big, firm decision is leading to lots of more scary questions and that's understandable (and I so get it!) - but I do think you should then take on all of the responses in good faith.

Honestly, I didn't read any of those as provocative - I thought they were sensible in relation to your own questions - just stuff to think on, iykwim.

 

[AnnO'Neemus]

You might want to explore what's a likely natural outcome of that before trying to turn your forthcoming marriage into a transaction or contract law lecture.

Entering into a marriage is entering into a contract, there's no way of avoiding it. There are legal obligations, defined in law. It's not all puppies and kittens and romance, it needs to be taken seriously, and if people aren't capable of having sensible, rational discussions, then maybe they shouldn't be getting married.

 

[mauvais]

Entering into a marriage is entering into a contract, there's no way of avoiding it. There are legal obligations, defined in law. It's not all puppies and kittens and romance, it needs to be taken seriously, and if people aren't capable of having sensible, rational discussions, then maybe they shouldn't be getting married.

I agree completely, but with a slightly different take. Those obligations are a fundamental part of what the institution of marriage is, the two are indivisible, and if you're unhappy with the commitments/legal consequences or feel that you require a hedge against them, maybe it's not the right choice in the first place. There's nothing wrong with finding that to be the case - plenty of alternative arrangements exist. For a lot of people it's the automatic path rather than considered. This is all why I asked what the aim(s) of it is - the fuzzy ideals and the legal implications of whatever choice you make ought to be roughly aligned or else you inevitably have friction.

It's very difficult to express this, particularly in the written form, without appearing either sanctimonious or critical, and I don't think I've done a good job of it, but hopefully it's something to think about. FWIW I think the welfare of dependents under various unpleasant scenarios absolutely should be brought into this, it's basically your responsibility to do so; I'm less sure that trying to safeguard the individual personal equivalent is either OK or likely to work out well (other than in some passive instances, e.g. life insurance)

 

[kebabking]

mod - having done something similar, my advice to you would be to talk to a solicitor and get their advice, then have a conversation with your intended about the best way forward ( ideally, she should have a her own conversation with a solicitor..), then get it all drawn up.

I quite deliberately suggest doing it this way to ensure that neither side gets, or feels, railroaded into something that's more to the advantage of the other party than them.

 

[friendofdorothy]

My general advice is - there is nothing romantic about a shared mortgage.

Otherwise as everyone else says be sure to get good advice from a lawyer - and draw up a will after you marry.

 

[bellaozzydog]

Thanks for all the replies.

Of course I've spoken to my missus about all this. Extensively!

The other option is putting my money into a 1 bed place here in Brighton with a small mortgage. My daughters future is secured. I'd have somewhere to live in the event of us separating or I'd have an income to use as a pension* (from the rent of the flat) when I stop working.

* I don't have a pension (at the moment)

Seems like the simplest option

my sister is currently a bit fucked. She had a mortgage with second husband and two kids. She is now with third husband plus extra kid in same house but has been paying interest only and husband two is still on the mortgage. They had a key worker scheme deposit help as both were social workers

her and husband three don’t seem to have been able to get own mortgage on the place and now the second husband has been diagnosed with terminal lung cancer and has adult kids, my sisters step sons

a bit messy

we (family) can’t help out because marriage three appears to be a bit dodge and giving her a big deposit when she wants to put husband three on the mortgage could potentially add to the difficulties

In my mind it’s always worth having a separate asset/plan as a bit of independent security

probably not much help

Good luck
Lots of love BellaOzzyDog, no partner, no kids, no connected vas deferens

 

[Miss-Shelf]

Lots of love BellaOzzyDog, no partner, no kids, no connected vas deferens

 

[mod]

Seems like the simplest option

my sister is currently a bit fucked. She had a mortgage with second husband and two kids. She is now with third husband plus extra kid in same house but has been paying interest only and husband two is still on the mortgage. They had a key worker scheme deposit help as both were social workers

her and husband three don’t seem to have been able to get own mortgage on the place and now the second husband has been diagnosed with terminal lung cancer and has adult kids, my sisters step sons

a bit messy

we (family) can’t help out because marriage three appears to be a bit dodge and giving her a big deposit when she wants to put husband three on the mortgage could potentially add to the difficulties

In my mind it’s always worth having a separate asset/plan as a bit of independent security

probably not much help

Good luck
Lots of love BellaOzzyDog, no partner, no kids, no connected vas deferens

My relationship with my partner ended last October / November. Due to covid and me being in the high risk category.

I’ve since bought and recently loved into my own flat. It was a horrible break up but glad it happened when it did and not when we owned a pls e together!