Moral Money: our reader is facing a fundamental stress test for couples
Dear Moral Money,
I enjoy your sage advice and wonder if you can help me please?
After 25 years of marriage, my husband left me for a younger colleague, and I had to fight hard to get my 50pc. I had a career, but had taken time out to devote to the family, which allowed my ex to climb the ladder. At the end, he earned more than double my salary, and had a very nice company car allowance.
Due to health problems, I am now trying to cut working to a minimum. Thanks to my divorce settlement, I own my home worth £450,000, and my partner lives with me. He is divorced, too, and used his settlement to buy a house he rents out as a holiday let. He also works, and earns around £45,000 a year.
We split food and bills equally, but he doesn’t contribute to other household costs. I pay for the majority of the maintenance on the house.
After some arguments about this, he has paid out for a few things, but wants them to be reflected in part-ownership of the property.
Am I right to give him a share in my home? Should I demand a share in his business in return?
I worry if I wanted out of the relationship for any reason I’d struggle to access my money?
I hope this makes sense, and that you can offer some advice.
Divorce and asset splitting leaves scars, and it is to be expected that we will forever be more careful about how we share things in relationships. I am not one for the romantic notion that if you love each other there is no need to consider what would happen if you were not together in the future.
This is a fundamental stress test of any couple’s finances, and if you even like each other enough not to want to cause unnecessary grief, let alone love each other, then we will want to put some effort into thinking, talking and planning for a tidy ending.
Common sense tells us that most couples do not die simultaneously, therefore, even if you stay together for life, someone will go first. Planning and documenting what a fair outcome looks like when you part is an act of care and consideration for each other.
To your issue about maintenance costs. I often find myself in conversations with home owners about the cost of maintenance of a home they live in. Something about “consuming” or living in the property makes the hard financial facts get all fuzzy.
A property needs a refresh every 10 years to maintain value. As an example, a three-bed house with two bathrooms, a kitchen, lounge and dining room/second reception would need a budget for one room refreshed each year on a cycle – that way you will get two hallways tidied up once a decade, too. Allow £10,000 for the kitchen refit and £5,000 for each of the bathrooms, £3,000 for the other rooms. Added up, that’s £41,000 over 10 years, or £4,100 per year – and that’s just for the interior. You may well need to add another £2,000 to the annual budget so the outside gets a lick of paint once a decade, too.
When I explain it like this to my clients they nod and agree, but when I add the thousands of pounds to their financial plan they are sure they don’t spend that much. Then, quite by accident, we get to talking about the £55 spent on a retro light pull that reminded them of grandma’s house, and I feel sure we’re in fact probably underestimating the true cost.
Being a property owner is expensive, and when it comes to our home we want to be able to have an environment we enjoy. After all, we will be spending a lot of time there – so let’s not kid ourselves about the cost.
You mention your new partner’s holiday let – I am guessing he therefore is well aware of the need to make provision for maintenance as a property owner. Maybe you could ask if he has a formula for making provisions, or if he just deals with maintenance as and when required. If the latter, then how much has this amounted to on average per year, and is that expected to be enough or are some bigger spends predicted?
You could then use whatever method he sees as reasonable in his business to come up with an equivalent budget for maintaining your property, and then ask him to share that identifiable cost. It is possible that, viewed in this way, he will see the reasonableness of your request as he happily shares the other more obvious “consumption” costs such as bills and food.
I definitely don’t think you should be giving up equity in your home to reflect the contribution your partner makes to maintenance, but it would be a different story if what you refer to as maintenance is actually structural change that adds value – such as converting the loft or building an extension.
If your partner was helping fund property development rather than maintenance then sharing a representative portion of increase in value achieved by development may well be fair. But maintenance is not development and it is part of the cost of “consumption” and needs to be shared between the consumers.
I am pleased you have a new partner and I am also impressed that you are considering your own financial needs and working out how to ask for them to be met.
I hope you live happily ever after, and I think it is more likely to be so if you are the type of couple who can have sensible discussions about how it looks if you don’t get the fairytale ending.