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What should I go for in my divorce settlement?

An estate agent’s ‘sold’ sign outside a property

Q I am hopefully divorcing in the new year and am in a dilemma as to what to have in the divorce settlement. We own our house, have no mortgage or other debts, and have savings and pensions and two grown-up children who don’t live at home.

My dilemma is, do I go for the house which I would want to rent out and then use the income to buy another property? Can this be done? I earn a very low income so I’m looking to try and earn money from the house. Or do I go for half the value of the house, all savings and husband’s pension and hopefully with the proceeds buy a house to live in and a house to rent? What is the best option? LL

A Sorry to have to break this to you, but it’s not what you decide you want to go for that determines what you will end up with in a financial settlement after you divorce. You’ll get what you and your husband agree would be a fair split or, if you can’t agree, what a court thinks is fair. I doubt very much that a court would think that you getting half the family home, all the savings and you husband’s pension would be at all equitable, even if it felt that you were financially dependent on your husband.

Given that a court would be unlikely to award you what you want, it is infinitely preferable to reach an agreement with your husband, possibly with the help of a mediator or solicitor. The more you can agree on your own, the lower the cost of getting a financial settlement will be.

If your husband were to agree that you should get the family home, I’m not sure that renting it out and buying another property is an option unless you’re prepared to take out a mortgage to enable you to buy another property. You wouldn’t be able to use the rental income to buy a property until you had saved up enough of it to pay the purchase price of another property all in one go. The alternative to renting out your home to get some money from it would be to sell up and buy somewhere cheaper with lower running costs if it is also smaller.

You’ll find helpful advice on agreeing a financial settlement on divorce on the website of the Money Advice Service.

This article titled "What should I go for in my divorce settlement?" was written by Virginia Wallis, for theguardian.com on Monday 8 January 2018 11.11am

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