PensionsMay 24 2021

How to help older couples who are splitting up

  • Describe some of the challenges of getting divorced in retirement
  • Identify the role of a financial adviser in the process
  • Describe the challenges with defined benefit pensions
  • Describe some of the challenges of getting divorced in retirement
  • Identify the role of a financial adviser in the process
  • Describe the challenges with defined benefit pensions
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How to help older couples who are splitting up
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 For these reasons, it is worth considering with clients whether a divorce is in practice the best way forward. What is it that they wish to achieve? Sometimes either formal judicial separation or a slightly less formal separation agreement, rather than divorce, achieves a level of certainty for the couple and enables them to live financially independently of one another without triggering some of the less desirable effects of divorce.

 There may be no rush to remarry, as often cohabitation is seen as more appealing for recent divorcees in retirement than remarriage. It may be that an individual prefers to separate rather than divorce so as to specifically avoid pressure from a new partner to remarry.  

 Separation agreements are often expressed so that if there were to be a divorce in the future the divorce agreement would simply reflect the terms of the separation agreement, thereby giving as much certainty as possible. However, these are not absolutely binding on the Court on divorce.  

 The Alternative Dispute Resolution (ADR) route

 The court system in England was already over-burdened, and the current Covid-19 pandemic has significantly worsened the position. It is clear that there will be delays for a long time to come. Couples separating in later life often want a faster and more amicable process.  

 It is therefore advisable to consider other methods of resolving matters wherever possible. 

 Arbitration is available to resolve financial disputes on divorce. Parties can appoint an arbitrator to determine the issues between them and agree to submit to the arbitrator’s decision. Once the decision has been made, the parties file an agreed order reflecting the outcome of the arbitration with the Court, which results in a final and enforceable court order.  

 Mediation is another method of resolving matters without going to court. Couples meet together with a mediator and discuss the issues between them in an effort to reach an agreement. There is no guarantee that an overall agreement will be reached, but nevertheless it can be used to resolve any immediate issues that need to be resolved such as living arrangements pending a court appointment.

Though ultimately there is no substitute for legal advice, using the tips outlined above as a guide advisers can play a pivotal role in helping safeguard their clients' emotional and financial interests, helping to take the edge off what will naturally be one of the more difficult and stressful times in their lives.

Amy Radnor is a partner at Farrer & Co 

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CPD
Approx.30min
Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.
  1. Lasting powers of attorney in relation to property and affairs or personal welfare need to be put in place before a person loses capacity, true or false?
  2. What role can a financial adviser play in the financial disclosure document?
  3. According to the author, what kind of need is expected to be the most important for older couples who are divorcing?
  4. It is not possible to share a pension that is in payment, true or false?
  5. Why is splitting the defined benefit pension difficult?
  6. Divorce is the only option for couples wanting to separate, true or false?
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