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Divorce and Finances: How could divorce affect your finances?

08.11.2018

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Here at Austin Kemp, we have seen an increasing number of older couples wanting advice regarding their divorce and finances.  Although 2017 saw the lowest divorce rates of opposite-sex couples since 1973, divorce rates actually increased compared to 2015 for men aged over 45 years old and woman aged over 50 years old.

As couples approach retirement age, their pensions can often be their most valuable assets, other than the family home. Indeed, one of the first questions we are asked by our older clients is, how their divorce and finances are treated.

 

Pensions as part of the financial settlement upon divorce

Just like the family home when considering divorce and finances, pensions can form part of the financial settlement when considering divorce and finances.

 

For an older couple, discussions surrounding pensions can often make up a large proportion of the negotiations, as pensions can often form a significant percentage of the assets within a marriage.

divorce and finances

 

It is possible to divide most pensions upon divorce. It’s important to note here that the basic State Pension cannot be split. The rules surrounding pension division can be complex, so it is important to seek advice from a solicitor relating to your individual circumstances.

 

How do I know the value of my pension?

Getting an accurate valuation of a pension, for the purpose of divorce and finances, can be tricky. Obviously, knowing a pension’s value is vital in order to have meaningful negotiations regarding the financial settlement. It is often necessary to involve an actuary to ensure that a pension’s value is accurately reflected.

 

Pension sharing

It may be possible to get a share of your spouse’s pension/s (or they could get a share of yours). Your share of the pension could either be transferred into your name or you may be able to join your spouse’s scheme, instead.

 

If your spouse has already reached retirement age and is getting their pension, but you are not yet old enough, you could agree to get a share of their pension further down the line. This is known as deferred pension sharing.

 

Deferred lump sum

Instead of sharing your spouse’s pension, you could agree that you will get a lump sum of money from your spouse’s pension when they reach retirement age.

 

Offsetting pensions may be possible

In some circumstances, a couple may agree that, as part of the financial settlement, one spouse may get a larger share of other assets and the other spouse will keep their pension.

 

Whether this is viable will depend upon a number of factors, including the value of the other assets compared to the value of the pension/s.

 

Pensions and divorce

These are just some of the ways that pensions can be dealt with upon divorce and finances. The rules can differ for couples who have already retired and are already receiving their pensions when they start the divorce process.

 

For older couples, pensions can often form a significant part of the financial settlement when addressing divorce and finances. For those in this situation, it is highly recommended that you seek independent legal advice, on what can be a very complex area of law.

 

How can our expert divorce solicitors help you with your divorce and finances?

Our expert divorce solicitors can help you with a range of legal issues:

 

Contact our expert divorce solicitors for advice

For more information on divorce and finances call our divorce solicitors on 0845 862 5001 or email mail@austinkemp.co.uk.

 

Our expert divorce solicitors offer a nationwide service. We have client meeting office facilities available, in order to have face-to-face client meetings / conferences as and when required in our:

Leeds Office: St Andrew House, The Headrow, Leeds, LS1 5JW

Sheffield Office: Pinfold Street, The Balance, Sheffield, S1 2GU

Manchester Office: King Street, Manchester, M2 4PD

Wakefield Office: Market Walk, Wakefield, WF1 1QR

Canary Wharf Office: 25 Canada Square, Canary Wharf, London, E14 5LB

London Office: 01 Nothumberland Avenue, Trafalgar Square, London, WC2N 5BW

Please contact us for more details.

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