Is Lack Of Financial Planning Impacting Your Post-divorce Future?
Figures out last week, from Citizen’s advice, evidence what the legal profession already knew. Divorces are up by 25% over last year, as a consequence of the Covid 19 pandemic and lockdown forcing unhappy couples to remain with each other with little or no respite.
Legal and General has ascertained only 3% of divorcing couples over 50 have had financial advice when divorcing and are 4 times more likely to ask a friend. This is a frankly terrifying statistic when one considers the financial impact divorce will inevitably have on one’s long term financial security.
Some clients don’t understand that their income or lack of it is a significant factor and in certain circumstances they may be entitled to maintenance for themselves and not just the children, maybe for a period of time to help them back onto their feet.
Other clients comment they would prefer the house in return for leaving their spouses pension untouched. In fact, just 12% consider pensions at all which is a really bad mistake when one considers in many cases pension funds can be worth more than their home. Pensions can be shared but only if there is a court order in place. Once they are shared one’s former spouse circumstances become irrelevant unlike if no sharing order is made, when a dependant’s pension is lost entirely on divorce and maintenance would stop on the death of a former spouse.
Even if separating couples have no financial assets between them a financial agreement which protects against future claims is essential yet 69% of divorcing couples don’t even have the benefit of that basic security.
Other issues need careful consideration, for example if you own more than 1 property will you have to pay capital gains tax if you sell it on divorce. Any experienced family lawyer will hold off obtaining your final decree to ensure your matrimonial assets benefit your children not the tax man.
Going through divorce is well recognised as being one of life’s most traumatic events The stress and anxiety may make it difficult to see the wood for the trees. Seeking specialist legal advice and planning early may just make matters that bit easier to deal with.
Should you wish to discuss any of the issues raised further or have any questions of how this may affect you, please contact a member of our team below who would be more than happy to assist you.