Will My Husband’s Private Pensions Form Part Of The Divorce Settlement?

There are usually a number of financial issues to be resolved following the breakdown of a marriage. These often include dividing capital assets and pensions and the provision of maintenance for either party of the marriage or any children of the family.

The Court has the power to make Orders including maintenance for one of the parties (and in certain circumstances for any children of the family), property adjustment orders, lump sum orders and pension sharing or attachment orders.

The starting point in any financial settlement is to establish the nature and extent of each parties income, assets and liabilities.

The court has very wide discretion and takes various factors into account when considering what Orders should be made. The Court will consider all the circumstances and will give first consideration to the welfare of any children of the family. The court will then have regard to the following factors:-

  • The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
  • The standard of living enjoyed by the family during the marriage
  • The age of the parties and the duration of the marriage
  • Any physical or mental disability of either of the parties to the marriage
  • The contributions which each of the parties has made or is likely in the foreseeable future to make for the welfare of the family
  • The conduct of the parties

The starting point in any financial settlement is to establish the nature and extent of each parties income, assets and liabilities. Both parties will be expected to provide full and frank financial disclosure of their respective financial positions whether you reach a voluntary agreement or not. The Form E Financial Statement is a good template to use to ensure that all the relevant information is provided.

It is important that pensions are not overlooked when considering a financial settlement on divorce as consideration will need to be given to how both parties needs can be met on retirement.

It is important that pensions are not overlooked when considering a financial settlement on divorce as consideration will need to be given to how both parties needs can be met on retirement. If either party has any pension funds then they should be considered. Details of the pension fund including the cash equivalent value should be obtained from the pension provider along with information about any other benefits. The cash equivalent value reflects the capital value of the pension benefits which have been accrued to date or which are already in payment. With some schemes the transfer value may be different to the actual fund value and advice will need to be sought from a pension expert.

When considering if a private pension will form part of the divorce settlement there are three main ways of dealing with pensions on divorce:-

Pension sharing – this allows a percentage share of a member’s pension to be transferred into a pension scheme in the ex-spouses name as their own pension fund

Offsetting – this involves balancing the value of a pension against another asset. For example if one party retains their pension fund the other party retains a bigger share of the other assets

Attachment – this is where a percentage of a member’s pension is set aside for the ex-spouse to claim on retirement

There are situations where a private pension would be more likely to form part of a divorce settlement. For example one party may have taken time out of work to care for children and not had the opportunity to build up their own pension where the other party may have built up a significant fund.

In some cases the pension may be the only significant asset and in some cases the pension fund may be even more valuable than the family home.

In some circumstances it may be appropriate for there to be an unequal division of the pension capital. For example if one party has a greater income need in retirement due to a health problem or disability.

There are situations where a private pension would be less likely to form part of a divorce settlement. For example where there is a short childless marriage or where the parties divorcing are still both young and retirement is some time in the future.

A pension might not be considered as part of a divorce settlement where one party has other non-pension income available to them in retirement that is sufficient to meet their needs.

Pensions are complicated and expert assistance will often be required from an actuary and an independent financial advisor.

Top Tips

It is important that you try and resolve financial issues amicably without Court proceedings. There are a number of options available from direct negotiations, lawyer led negotiations, mediation and collaborative law.

If you can reach an agreement then a Consent Order should be prepared to outline the agreement reached to ensure that it is legally binding.

Not all cases are settled by voluntary agreement and if an agreement cannot be reached within a reasonable period of time, or if one party will not co-operate or provide financial disclosure, then it may be necessary to commence court proceedings.

You can also visit the Chafes Hague Lambert Family Department, we have a range of useful information sheets which can be accessed here.

The Family Justice Council has prepared a useful guide designed to help litigants in person called Sorting out Finances on Divorce. The guide provides a general overview of the law and some explanation of issues that may arise including pensions. You can access the guide here.

 

 

Getting Married For A Second Time. Do I Need A Pre_Nup?

A pre-nuptial agreement is a contract made between couples, prior to their marriage. The pre-nuptial agreement itself covers how the couple wish assets to be divided, in the unfortunate event of divorce.

Each party must obtain independent legal advice, which will strengthen the validity of the agreement.

Once a couple marry, most assets are considered to be “marital assets” and these essentially form one financial pot.  The main purpose of a pre-nuptial agreement is to protect assets purchased jointly or individually or pre-marital assets that have been bought in to the relationship, when the marriage ends.

Although, strictly speaking pre-nuptial agreements are not legally binding in England and Wales, recent case law seems to confirm that if the agreement has been entered into freely and each party understands its implications, then the Court may uphold the agreement.

It is therefore, very important to draft and execute a pre-nuptial agreement correctly. The Law Commission has set out guidelines on how this can be achieved.

  • The pre-nuptial agreement must be entered in to freely, there should be no duress or undue influence, and both parties must agree and understand the implications of entering in to the agreement.

The pre-nuptial agreement must be finalised at least 28 days before the wedding.

  • The couple must enter in to full financial disclosure, so each party is aware of the other’s financial position, before agreeing the terms of the agreement.
  • Each party must obtain independent legal advice, which will strengthen the validity of the agreement, as each party will be fully advised on the implications of the agreement.
  • Finally the pre-nuptial agreement must be signed a deed.

Pre-nuptial agreements can include the following assets:

  • Properties
  • Savings
  • Company shares/ Businesses
  • Inheritance
  • Jewellery including gold jewellery given during the wedding ceremonies
  • Family heirlooms

There are many circumstances in which marrying couples may consider entering in to a pre-nuptial agreement. Here are just a few circumstances:

  • You are marrying for the second time and you would like to protect the settlement you received from your previous marriage.
  • You are marrying for the second time and you wish for your assets to be left to your children from your previous marriage, in your will.

You are a widow and you are marrying for a second time and you wish to protect your assets from your first marriage, including gifts from your first husband/ wife.

You are marrying for the first or second time and you wish to protect your business interests.

You are marrying for the first or second time and you wish to protect your property portfolio.

  • You are marrying for a first or second time and you wish to protect any inheritance you have received, including property which has been in your family for a number of generations.

This list is not an exhaustive of the reasons for entering in to a pre-nuptial agreement.

As the list above demonstrates a pre-nuptial agreement is relevant in many circumstances, and not just when you are marrying for a second time.

Getting Married For A Second Time. Do I Need A Pre-Nup?

A pre-nuptial agreement is a contract made between couples, prior to their marriage. The pre-nuptial agreement itself covers how the couple wish assets to be divided, in the unfortunate event of divorce.

Each party must obtain independent legal advice, which will strengthen the validity of the agreement.

Once a couple marry, most assets are considered to be “marital assets” and these essentially form one financial pot.  The main purpose of a pre-nuptial agreement is to protect assets purchased jointly or individually or pre-marital assets that have been bought in to the relationship, when the marriage ends.

Although, strictly speaking pre-nuptial agreements are not legally binding in England and Wales, recent case law seems to confirm that if the agreement has been entered into freely and each party understands its implications, then the Court may uphold the agreement.

It is therefore, very important to draft and execute a pre-nuptial agreement correctly. The Law Commission has set out guidelines on how this can be achieved.

The pre-nuptial agreement must be entered in to freely, there should be no duress or undue influence, and both parties must agree and understand the implications of entering in to the agreement.

The pre-nuptial agreement must be finalised at least 28 days before the wedding.

The couple must enter in to full financial disclosure, so each party is aware of the other’s financial position, before agreeing the terms of the agreement.

Each party must obtain independent legal advice, which will strengthen the validity of the agreement, as each party will be fully advised on the implications of the agreement.

Finally the pre-nuptial agreement must be signed a deed.

Pre-nuptial agreements can include the following assets:

Properties

Savings

Company shares/ Businesses

Inheritance

Jewellery including gold jewellery given during the wedding ceremonies

Family heirlooms

There are many circumstances in which marrying couples may consider entering in to a pre-nuptial agreement. Here are just a few circumstances:

You are marrying for the second time and you would like to protect the settlement you received from your previous marriage.

You are marrying for the second time and you wish for your assets to be left to your children from your previous marriage, in your will.

You are a widow and you are marrying for a second time and you wish to protect your assets from your first marriage, including gifts from your first husband/ wife.

You are marrying for the first or second time and you wish to protect your business interests.

You are marrying for the first or second time and you wish to protect your property portfolio.

You are marrying for a first or second time and you wish to protect any inheritance you have received, including property which has been in your family for a number of generations.

This list is not an exhaustive of the reasons for entering in to a pre-nuptial agreement.

As the list above demonstrates a pre-nuptial agreement is relevant in many circumstances, and not just when you are marrying for a second time.

Tips For Managing Legal Costs

.Graham understands the stress often associated with family matters from when relationships are starting to break down to making decisions about resolving future financial arrangements. His advice for managing legal costs is to seek professional help early to work out finances and how long a process may take. This pro-active approach gives people time to budget and be prepared.

Seeking early advice also helps manage potential litigation costs as there may be an opportunity to speak to a mediator to prevent unnecessary costs.

When dealing with a family law expert, the process should involve:

  • estimating fees and other anticipated costs (including appointing experts, for example, a surveyor or pension adviser to act on behalf of both parties)
  • funding options
  • the arrangement and frequency of payments (such as interim or deferred payments)

A family lawyer also needs to keep costs down by being responsive, giving regular progress updates well in advance of the changes having an impact upon the people involved.

Any family case

First consider how legal costs will be paid.

It is common for people to borrow from family or friends or use savings to cover costs. Other funding options include securing a personal bank loan or a 0% credit card – both are repaid from fees or assets recovered and can help by spreading the cost over 12 to 18 months.

In limited cases public funding is available (in 2013 it was abolished for family cases except those involving domestic violence. Find out more about funding here. [ADD LINK https://www.gov.uk/legal-aid ] ).

Family matters often include other members, including children.

In this case Graham advises seeking advice from a professional who will look out for your best interests and is also a Children’s Act expert. Complex issues to sort out could cover disputes over parental rights such as where the children could live, financial arrangements and the level of contact each parent may have with their children. Full details are here [ADD LINK https://www.legislation.gov.uk/ukpga/2004/31/section/2 ]

Also, if a family business is involved this may result in one person being compensated or receiving a lump sum, rather than selling the business.

Divorce cases

Divorce proceedings can be complicated and involve the couple, children, assets and finances.

As this can be an especially stressful time for everyone affected Graham also advises seeking advice from a professional who is approachable and gives legal advice everyone can understand. This can help to not only manage the situation but can impact on costs – especially when one party is not clear on the process or where they stand. In short, an effective resolution helps to make it easier all round as no one is left wondering what is going on, how much the legal costs will be, and what they need to do next to move things along.

Whoever issues divorce proceedings is entitled to pursue an order for costs.

Some lenders also offer a ‘divorce loan’ which may have a lower % interest rate than a standard bank loan. This type of loan requires a property to be in the name of the person requesting the loan, and is paid back from recovered assets.

For someone who has no access to finances but their spouse does, a ‘legal services order’ may be an option. This involves the other party making funds available to cover their wife or husband’s costs.

Going through any family matter is stressful so requires experience, knowledge and a personal approach as each situation is different.

Graham’s advice to anyone faced with a family situation requiring legal advice is to speak to an expert as early as possible.

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Tips For Managing Legal Costs

My advice for managing legal costs is to seek professional help early to work out finances and how long a process may take. This pro-active approach gives people time to budget and be prepared.

Seeking early advice also helps manage potential litigation costs as there may be an opportunity to speak to a mediator to prevent unnecessary costs.

When dealing with a family law expert, the process should involve:

estimating fees and other anticipated costs (including appointing experts, for example, a surveyor or pension adviser to act on behalf of both parties)

funding options

the arrangement and frequency of payments (such as interim or deferred payments)

A family lawyer also needs to keep costs down by being responsive, giving regular progress updates well in advance of the changes having an impact upon the people involved.

Any family case

First consider how legal costs will be paid.

It is common for people to borrow from family or friends or use savings to cover costs. Other funding options include securing a personal bank loan or a 0% credit card – both are repaid from fees or assets recovered and can help by spreading the cost over 12 to 18 months.

In limited cases public funding (Legal Aid) is available (in 2013 it was abolished for family cases except those involving domestic violence).

Family matters often include other members, including children.

I advise seeking advice from a professional who will look out for your best interests and is also a Children’s Act expert. Complex issues to sort out could cover disputes over parental rights such as where the children could live, financial arrangements and the level of contact each parent may have with their children.

Also, if a family business is involved this may result in one person being compensated or receiving a lump sum, rather than selling the business.

Divorce cases

Divorce proceedings can be complicated and involve the couple, children, assets and finances.

As this can be an especially stressful time for everyone affected I also advise seeking advice from a professional who is approachable and gives legal advice everyone can understand. This can help to not only manage the situation but can impact on costs – especially when one party is not clear on the process or where they stand. In short, an effective resolution helps to make it easier all round as no one is left wondering what is going on, how much the legal costs will be, and what they need to do next to move things along.

Whoever issues divorce proceedings is entitled to pursue an order for costs.

Some lenders also offer a ‘divorce loan’ which may have a lower % interest rate than a standard bank loan. This type of loan requires a property to be in the name of the person requesting the loan, and is paid back from recovered assets.

For someone who has no access to finances but their spouse does, a ‘legal services order’ may be an option. This involves the other party making funds available to cover their wife or husband’s costs.

Going through any family matter is stressful so requires experience, knowledge and a personal approach as each situation is different.

 

­­­­­­­­­­­­­­­­

 

 

 

Tips For Managing Legal Costs

My advice for managing legal costs is to seek professional help early to work out finances and how long a process may take. This pro-active approach gives people time to budget and be prepared.

Seeking early advice also helps manage potential litigation costs as there may be an opportunity to speak to a mediator to prevent unnecessary costs.

When dealing with a family law expert, the process should involve:

My advice for managing legal costs is to seek professional help early to work out finances and how long a process may take.

estimating fees and other anticipated costs (including appointing experts, for example, a surveyor or pension adviser to act on behalf of both parties)

funding options

the arrangement and frequency of payments (such as interim or deferred payments)

A family lawyer also needs to keep costs down by being responsive, giving regular progress updates well in advance of the changes having an impact upon the people involved.

Any family case

First consider how legal costs will be paid.

It is common for people to borrow from family or friends or use savings to cover costs. Other funding options include securing a personal bank loan or a 0% credit card – both are repaid from fees or assets recovered and can help by spreading the cost over 12 to 18 months.

In limited cases public funding (Legal Aid) is available (in 2013 it was abolished for family cases except those involving domestic violence).

Family matters often include other members, including children.

I advise seeking advice from a professional who will look out for your best interests and is also a Children’s Act expert. Complex issues to sort out could cover disputes over parental rights such as where the children could live, financial arrangements and the level of contact each parent may have with their children.

Also, if a family business is involved this may result in one person being compensated or receiving a lump sum, rather than selling the business.

Divorce cases

Divorce proceedings can be complicated and involve the couple, children, assets and finances.

As this can be an especially stressful time for everyone affected I also advise seeking advice from a professional who is approachable and gives legal advice everyone can understand. This can help to not only manage the situation but can impact on costs – especially when one party is not clear on the process or where they stand. In short, an effective resolution helps to make it easier all round as no one is left wondering what is going on, how much the legal costs will be, and what they need to do next to move things along.

Whoever issues divorce proceedings is entitled to pursue an order for costs.

Some lenders also offer a ‘divorce loan’ which may have a lower % interest rate than a standard bank loan. This type of loan requires a property to be in the name of the person requesting the loan, and is paid back from recovered assets.

For someone who has no access to finances but their spouse does, a ‘legal services order’ may be an option. This involves the other party making funds available to cover their wife or husband’s costs.

Going through any family matter is stressful so requires experience, knowledge and a personal approach as each situation is different.

 

­­­­­­­­­­­­­­­­

 

 

 

Making Sense Of Pensions And Divorce

There is no getting away from the fact that pensions can be complicated. It’s a shame that this is the case when most people will need a pension to provide them with an income in retirement. No wonder pensions are often mistrusted and uptake is low.

Pension sharing is a complex area. Our advice is to seek assistance early

Nonetheless, pensions often form an important part of the finances to be considered when divorcing, so seeking advice that educates and guides individuals to a fair conclusion is vitally important. We take time to strip away the jargon and ensure that divorcing couples understand how pensions and the pension sharing process work. Our reports are written in plain English and we welcome face to face meetings to explain and discuss matters in greater depth.

Not all pensions are the same, and in most cases just adding up the valuations and dividing them on a 50/50 basis can create very different incomes in retirement, which generally isn’t what is required.

Broadly speaking there are two types of pension:

Final Salary Pensions

Final salary pensions (sometimes referred to as ‘defined benefit’ pensions) promise the member a pension at retirement based on their salary and number of years’ service. Any pension share applied to these schemes will be based on the valuation the scheme has calculated. The share may result in either a physical transfer of funds into a pension plan the receiving spouse has chosen, or the share may be used to set up the receiving spouse as a new and separate member of that same pension scheme.

Money Purchase Pensions

Money purchase (or ‘defined contribution’) schemes are individual pension pots that belong to the member and have clear and transparent investments within them which generally can be valued easily. At retirement this pot of money can provide an income in various ways. At retirement this pot of money can provide you with an income in various ways. Of growing popularity is to draw down from the invested fund a bit like a bank account, however, some like the certainty of a known income which can be established by buying an annuity. However, some prefer the certainty of a known and guaranteed income which can be established by buying an annuity. In many ways sharing this type of scheme is much simpler. If money purchase pensions were the only type of scheme held and both spouses were similar in age and invested in a similar fashion then a 50/50 share could produce similar incomes in retirement.

Most pension schemes should provide annual statements that will give an idea of the income you could receive in retirement. Sometimes they can be a bit complicated (blame the Regulator!) but the scheme helpdesks (or us) can often help explain.

Sharing Pensions

Sharing pensions on divorce is typically based on dividing the pensions to produce equal incomes at retirement. It is not really practical to detail here the finer points of how this is achieved, as the processes can be very complex. In essence, it involves a mathematical calculation that endeavours to share the pensions in a way that provides maximum benefits for both parties.

On occasion we may be asked to consider alternative scenarios whereby one party retains their pension (or a larger share of it) with the other retaining a greater share in another asset, for example, the family home. This is commonly known as ‘Offsetting’.

What next?

A Pension Sharing Report will show how pensions should be shared to create equality, and what the resulting income might be at retirement. Consultation with a Financial Planner can help to make sense of the income you can expect in retirement, which is obviously important when considering your financial future. We use cash-flow modelling to illustrate how your financial future might look in an easily understood graphical format. This will allow different scenarios to be visualised at a time when there may be many permutations for you to consider.

Pension sharing is a complex area. Our advice is to seek assistance early so that you have time to become familiar with the process, consider the options available and what outcomes would work best for you. Don’t sleepwalk into the process or feel bullied because you don’t have enough information or support. Gathering pension information and getting a state pension forecast (https://www.gov.uk/check-state-pension) is going to be important.

Find out more about our services at:-
www.blueskyifas.co.uk and
www.pensionsharingannex.co.uk

Making Sense Of Pensions And Divorce

There is no getting away from the fact that pensions can be complicated. It’s a shame that this is the case when most people will need a pension to provide them with an income in retirement. No wonder pensions are often mistrusted and uptake is low.

Pension sharing is a complex area. Our advice is to seek assistance as early as possible.

Nonetheless, pensions often form an important part of the finances to be considered when divorcing, so seeking advice that educates and guides individuals to a fair conclusion is vitally important. We take time to strip away the jargon and ensure that divorcing couples understand how pensions and the pension sharing process work. Our reports are written in plain English and we welcome face to face meetings to explain and discuss matters in greater depth.

Not all pensions are the same, and in most cases just adding up the valuations and dividing them on a 50/50 basis can create very different incomes in retirement, which generally isn’t what is required.

Broadly speaking there are two types of pension:

Final Salary Pensions

Final salary pensions (sometimes referred to as ‘defined benefit’ pensions) promise the member a pension at retirement based on their salary and number of years’ service. Any pension share applied to these schemes will be based on the valuation the scheme has calculated. The share may result in either a physical transfer of funds into a pension plan the receiving spouse has chosen, or the share may be used to set up the receiving spouse as a new and separate member of that same pension scheme.

Money Purchase Pensions

Money purchase (or ‘defined contribution’) schemes are individual pension pots that belong to the member and have clear and transparent investments within them which generally can be valued easily. At retirement this pot of money can provide an income in various ways. At retirement this pot of money can provide you with an income in various ways. Of growing popularity is to draw down from the invested fund a bit like a bank account, however, some like the certainty of a known income which can be established by buying an annuity. However, some prefer the certainty of a known and guaranteed income which can be established by buying an annuity. In many ways sharing this type of scheme is much simpler. If money purchase pensions were the only type of scheme held and both spouses were similar in age and invested in a similar fashion then a 50/50 share could produce similar incomes in retirement.

Most pension schemes should provide annual statements that will give an idea of the income you could receive in retirement. Sometimes they can be a bit complicated (blame the Regulator!) but the scheme helpdesks (or us) can often help explain.

Sharing Pensions

Sharing pensions on divorce is typically based on dividing the pensions to produce equal incomes at retirement. It is not really practical to detail here the finer points of how this is achieved, as the processes can be very complex. In essence, it involves a mathematical calculation that endeavours to share the pensions in a way that provides maximum benefits for both parties.

On occasion we may be asked to consider alternative scenarios whereby one party retains their pension (or a larger share of it) with the other retaining a greater share in another asset, for example, the family home. This is commonly known as ‘Offsetting’.

What next?

A Pension Sharing Report will show how pensions should be shared to create equality, and what the resulting income might be at retirement. Consultation with a Financial Planner can help to make sense of the income you can expect in retirement, which is obviously important when considering your financial future. We use cash-flow modelling to illustrate how your financial future might look in an easily understood graphical format. This will allow different scenarios to be visualised at a time when there may be many permutations for you to consider.

Pension sharing is a complex area. Our advice is to seek assistance early so that you have time to become familiar with the process, consider the options available and what outcomes would work best for you. Don’t sleepwalk into the process or feel bullied because you don’t have enough information or support. Gathering pension information and getting a state pension forecast (https://www.gov.uk/check-state-pension) is going to be important.

What Should I Do With The Money From My Divorce?

My divorce is concluding soon and I am going to have a lump sum of money for the first time in my life. What is the best course of action to take and what options do I have?

Generally speaking, divorce is not a nice prospect.

That being said, I find that – with encouragement – clients can start to view a divorce as a beginning rather than an end.

A new start gives you the opportunity to re-evaluate and establish new goals and new objectives; and these goals will often hinge around your financial position post settlement.

If you end up with capitalised maintenance or a pension share, you could well end up with quite a sizeable amount of capital, and although positive in some ways, it can be daunting to know what to do with the money.

And the answer to the question of ‘what to do with it’, isn’t a one-size-fits-all one – it’ll be dictacted by the size of the settlement and your own individual circumstances.

If you have children

It may be that you can put money away for further education, or you might even want to set up a trust to help your children get their first foot on the housing ladder in a few years time.

If you were interested in setting up a trust, the main question would revolve around what sort of trust you want to set up. The type of trust you set up will depend on the ultimate goal for the capital and how much control you would like to retain in the interim period.

If your children are older, or you don’t have any children

Then you may want to consider investing the capital in such a way that it can help boost your income between now and when you retire.

You might consider home improvements, or even just splashing out on that dream holiday that you perhaps never had the time for before.

The options for large amounts of capital post divorce can feel quite daunting and it is easy to become overwhelmed with choice. If you have never invested before then where would you even begin?

It is a chance to take stock and consider what is most important to you and what your hopes and dreams are for your future now that you are in control.

If you haven’t already done so, opening an Individual Savings Account (ISA) would be a good place to start.

Barring the ISAs that lock you in for a specific time period, investing in an ISA means that your money will be growing without committing you to anything in the here and now; and with the rules now relaxed on ISA withdrawals, you can take money out and put it back as often as you like as long as you don’t breach the £20,000 ceiling.

Retirement is always a consideration too as in my experience, clients going through divorce are often at an age where retirement planning is a key consideration.

There are rules around what you can do with regards to making a pension contribution with a lump sum that relate to your earnings and again, this can be an area where many people feel a little confused with how to actually implement a pension contribution or start a new plan.

The bottom line is this: you have an opportunity to perhaps ask yourself questions that you never really had the time or facility to ask.

With a little help, you might find that your goals are closer than you once thought.

 

What Should I Do With The Money From My Divorce?

My divorce is concluding soon and I am going to have a lump sum of money for the first time in my life. What is the best course of action to take and what options do I have?

Generally speaking, divorce is not a nice prospect.

That being said, I find that – with encouragement – clients can start to view a divorce as a beginning rather than an end.

A new start gives you the opportunity to re-evaluate and establish new goals and new objectives; and these goals will often hinge around your financial position post settlement.

If you end up with capitalised maintenance or a pension share, you could well end up with quite a sizeable amount of capital, and although positive in some ways, it can be daunting to know what to do with the money.

And the answer to the question of ‘what to do with it’, isn’t a one-size-fits-all one – it’ll be dictacted by the size of the settlement and your own individual circumstances.

If you have children

It may be that you can put money away for further education, or you might even want to set up a trust to help your children get their first foot on the housing ladder in a few years time.

If you were interested in setting up a trust, the main question would revolve around what sort of trust you want to set up. The type of trust you set up will depend on the ultimate goal for the capital and how much control you would like to retain in the interim period.

If your children are older, or you don’t have any children

Then you may want to consider investing the capital in such a way that it can help boost your income between now and when you retire.

You might consider home improvements, or even just splashing out on that dream holiday that you perhaps never had the time for before.

The options for large amounts of capital post divorce can feel quite daunting and it is easy to become overwhelmed with choice. If you have never invested before then where would you even begin?

It is a chance to take stock and consider what is most important to you and what your hopes and dreams are for your future now that you are in control.

If you haven’t already done so, opening an Individual Savings Account (ISA) would be a good place to start.

Barring the ISAs that lock you in for a specific time period, investing in an ISA means that your money will be growing without committing you to anything in the here and now; and with the rules now relaxed on ISA withdrawals, you can take money out and put it back as often as you like as long as you don’t breach the £20,000 ceiling.

Retirement is always a consideration too as in my experience, clients going through divorce are often at an age where retirement planning is a key consideration.

There are rules around what you can do with regards to making a pension contribution with a lump sum that relate to your earnings and again, this can be an area where many people feel a little confused with how to actually implement a pension contribution or start a new plan.

The bottom line is this: you have an opportunity to perhaps ask yourself questions that you never really had the time or facility to ask.

With a little help, you might find that your goals are closer than you once thought.

 

What Is A MIAM?

Firstly, It’s important to know that the person you go to see for your Mediation Information and Assessment Meeting (MIAM)…...

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