TWO WAYS TO LEAVE YOUR LOVER
There are two different ways that a pension can be shared in a settlement. Firstly, a Pension Sharing Order will mean a direct transfer between one pension pot and another. The second, a Pension Attachment Order will mean the pension pot remains in the same hands as before, but the income derived from it is split.
Sadly, in an understandable attempt to save money many have turned to DIY law and divorce is no exception. Where settlements are undertaken without legal representation, is often likely to create problems. This is because agreements made today may be reopened tomorrow if paperwork is filed incorrectly or is incomplete.
58% TRY A D-I-Y DIVORCE
Naturally, this is more likely than when professional lawyers are involved in proceedings. The caution expressed is warranted because these DIY divorces accounted for 58 percent of all divorce settlements in 2020/21 according to the Ministry of Justice. A striking example of the problems that may arise after DIY divorces came in 2016 when a successful green energy entrepreneur was ordered by the Supreme Court to pay his ex-wife £300,000 years after their split. This was the case because both parties had earlier neglected to waive the right to make more claims against each other. While not so bad for the party receiving £300,000, many may be startled to realise that they may be vulnerable to such claims themselves if they went through a DIY divorce.
I certainly sympathise with the intention to save money, but there is a good reason why there are professionals. DIY is not without significant risks and complete responsibility.
That said, I remain confounded by the lack of attention to cashflow modelling in a divorce settlement. It would make the agreements easier to achieve with clarity about the needs of each party.
If you have a friend that is contemplating divorce suggest they get a proper cashflow done for them. You know where I am!
You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email firstname.lastname@example.org