Divorce Planning

When a couple get divorced there is no set formula for dividing assets or income. Because of this a pension may be taken into account in various different ways, or even ignored altogether if both the husband and wife have made their own pension provision.

If the courts do become involved, it will be their role to consider and determine a fair settlement. Any settlement will be according to the individual circumstances of each case. This means that the treatment of a pension on divorce will vary from case to case.

If for example, pension sharing is considered, the ex-spouse will require advice on whether to retain benefits in the existing pension arrangement (if permitted) or take a transfer. If a transfer is the only possibility – as will often be the case – then advice will be needed on the options available. Careful thought will also need to be given to the value placed on the pension rights.

The pension holder may also require advice on how to rebuild his or her retirement provision after a court order has been granted. This could involve making additional contributions but it might also include alternative long-term investments. Full consideration should be given to all options available. Whatever the case, divorce is a significant event in a person’s life.

Almost invariably its consequences require both parties’ financial plans to be reviewed and revised. As financial advisers, our role in the area of pensions and divorce is particularly wide-ranging. There may be many financial implications pre and post a court settlement. We can explain your options, help you set priorities and lead you through the difficult choices ahead.