Divorce is undoubtedly an emotionally charged experience, and when it comes to dividing financial assets, the complexities can be both challenging and intricate.
1. Seek Professional Assistance
Especially if your financial situation is intricate, seeking professional help becomes crucial. Signs that indicate the need for professional assistance include ownership of a business by one or both parties, financial dependency on one person, the presence of young children, multiple properties, one party facing a medical issue impacting their ability to work, or uneven ownership of significant assets like property and substantial pensions.
2. Crafting a Financial Agreement
A financial agreement, often referred to as a settlement, outlines the division of savings, property, pensions, life insurance, and other substantial assets. While involving the court is not always necessary, it is advisable to engage a solicitor to formalise the agreement with a consent order. This not only ensures legal binding but also protects both parties, preventing future claims.
3. Court Considerations
Should court involvement become necessary, the starting point is often a 50/50 split, with further examination of each party’s “needs.” This includes providing suitable housing for children, addressing the primary caregiver’s requirements, and considering disparities in earnings, with due credit to stay-at-home parents for their foregone earnings.
4. Addressing Pensions In A Divorce
Pensions become a pivotal element of your financial settlement in a divorce or civil partnership dissolution. Court orders are instrumental in confirming the status of pensions within the settlement.
Pre-Marriage Pensions
These may be ring-fenced, with the other party having no claim, determined on a case-by-case basis.
Pensions Built During Marriage
Options include splitting them or leveraging them as part of negotiations. For instance, one party might allocate a more substantial share of the family home to the other in exchange for retaining their pension.
5. Protecting Your Pension
Various strategies can be employed to handle pensions during divorce proceedings:
Pension Sharing
Involves receiving a percentage share of your former partner’s pension pot.
Pension Attachment or Earmarking
Entails a portion of your pension being paid directly to your former partner, resembling a maintenance payment.
Pension Offsetting
Involves offsetting the value of a pension against other assets. For instance, one party keeps their pension, while the former spouse or partner retains ownership of the home.
Navigating these financial intricacies during divorce requires careful consideration and, often, the guidance of professionals. Our team at Resolve is here to assist you in securing a sound financial future during these challenging times. Feel free to get in touch for personalised guidance tailored to your unique situation.