There is a reported upsurge in the number of people seeking to divorce over 50 or even later in life. In 2012 the number of people in the UK aged 60+ who filed for a divorce was 45% higher than it was in 2002. These figures are reputedly bound to continue to rise.
So what considerations are there when people divorce over 50, which differ from those which apply to their younger counterparts?
Issues surrounding child contact and child support are less likely to be a concern to such couples. Their main concerns are more likely to be about their own finances following the divorce. Couples in their 50s (or older) will be concerned about housing issues, pensions and possibly spousal maintenance.
Pensions almost always play a major part of the discussions in cases involving couples over the age of 50 years.
TIP 1: you should take time to better understand pension issues
In divorce or dissolution the pension can be the biggest asset after the family home. Pensions can be split in several ways. Therefore it is worth understanding the options before deciding what is best for you.
You should start by listing all the different pensions you and your spouse have and get a copy of the rules for each scheme. This can include:
· Schemes you have through work
· Personal pension schemes
· Additional state pension (but not basic state pension)
You need to ascertain the total value of the pensions you each have built up. This applies not only to the pensions built up while you were married or in a civil partnership but all of your pensions except the basic state pension. A current transfer value needs to be obtained from your pension provider.
There are various ways of dealing with pensions following a divorce or dissolution. This can include pension offsetting, a pension sharing order or a pension attachment order.
These issues can be quite complicated and it is necessary to obtain expert advice from an experienced and specialist family lawyer. It may also be worth your while getting expert assistance from an actuary or financial advisor who specialises in divorce or dissolution.
If you get divorced the court is allowed to consider your additional state pension as a financial asset which can be shared in a financial settlement through the making of a pension sharing order. This means that the part of the value of any additional state pension you have earned could be shared with your former spouse. Please note that the additional state pension is an amount you may be entitled to in addition to your basic state pension. You can apply for a state pension forecast on divorce by filling in the Department of Works and Pensions form B20 which should provide you with a lump sum valuation and help the court make a decision.
The pension changes introduced in April 2015 now mean that men and woman over the age of 55 years have more freedom in cashing in their pension pots. Therefore, there is more money available to the parties who divorce over 50, should they decide to cash in their pension pots which could amongst other things be utilised towards the purchase of alternative accommodation. However couples who do this need to take into account beforehand the tax consequences if they withdraw more than 25% of their pension fund. It is therefore essential that expert advice is sought before any withdrawals from the pension pot are made.
If you or your partner has already retired your pensions can still be split but the rules are different. It is not possible to take a lump sum from your ex-spouse’s pension if they are already getting an income from it.
TIP 2: consider carefully your housing options
Housing will always be a major issue. Where there are children the courts sometimes direct that the house should not be sold until the youngest child reaches 17 years or finishes full time education. If you were in your 50s or older then the children may have already “left the nest” or have left full time education and are no longer dependants whose needs are taken into consideration by the court. It may be more likely in such circumstances that the family home will have to be sold so you may need to obtain advice from a financial advisor. However at this time of your life it can be a lot more difficult to secure a new mortgage and lack of mortgage capacity could be a significant factor when deciding where to move to. You should seek advice from your specialist family lawyer on whether it is possible for you to agree a settlement which would enable you to remain in the family home if that is your objective, plus look at all the options available to you.
TIP 3: obtain advice from a specialist family lawyer on the issue of spousal maintenance
In some cases where one spouse is not working and the marriage has lasted for some time, spousal maintenance can be a significant issue. Usually it is the husband who will be asked to pay spousal maintenance to his wife and he faces the prospect that he could be required to pay maintenance to his estranged wife for the rest of her life or until she remarries. Both parties need to obtain advice on this. In such circumstances a husband should seek advice as to whether he is able to realistically achieve a “clean break order”.
TIP 4: couples separating or seeking divorce over 50 are more likely to be concerned as to what would happen to their assets on death
You will need to update your Will. If anything happens to you during your marriage, before the final decree of divorce, your old Will (if you have one) is still applicable. If there is no Will then the intestacy rules could mean that your estranged partner still benefits from your estate. However following the Decree Absolute being granted your former spouse would cease to be entitled under your previous Will or under the intestacy rules. If the financial issues have not been finalised prior to your death then it may still be possible for your estranged spouse to make a claim under the Inheritance Act against your estate.
TIP 5: be aware of the consequences of remarriage
If you remarry then any spousal maintenance in your favour would end. Remarriage also revokes any Will you may have made and sometimes where financial issues have not already been resolved it could in some circumstances prevent a party who has remarried potentially from making financial claims against the other. It is therefore most important to obtain advice from a family lawyer on all these issues.
To discuss separation or divorce over 50 please contact our family department on 0113 320 5000 or by email tofamily@winstonsolicitors.co.uk.
