Posted July 19th, 2011
A recent ruling in a divorce case has raised the bar in relation to discretionary trusts in divorce. In Whaley v Whaley the court ruled that an offshore discretionary trust set up by Mr Whaley’s father should count towards the marital assets even though Mr Whaley was not a beneficiary.
The issue the court ruled on was that Mr Whaley although not a beneficiary would probably receive capital from the trust in lieu of the “lost” divorce settlement. Therefore, the court ruled the discretionary trust to be an asset of the marriage.
If your divorce involves trusts or trust planning it is important to get the right advice and guidance.
For a confidential chat why not call me on 0800 092 1229 or email phil@thedivorceifa.co.uk
Tags: Beneficiary, Discretionary Trust, Discretionary Trusts, Divorce, Settlement | Posted in Discretionary Trusts |
Comments: No Comments yet!
Posted June 1st, 2011
Of all the enquiries I receive in a month the question “how much of the pension am I entitled to?” is easily the most common and as often seems the case in divorce matters there is no easy, straightforward or right answer. In fact, in a UK divorce it is at the discretion of the court.
So as an adviser I always keep an open mind as the legislation allows anything, pre, post, all, even future accrual to be taken into account. The case of N v F 2011 EWHC 586 is a useful reference.
Certain facts of the divorce will always play out – needs, length of marriage, ages, gender, health status, assets / resources including pensions, children/dependents, etc but it is up to the parties to negotiate the settlement together with their legal counsel.
In my opinion with regard to the pensions (rather than many other parts of the settlement), knowledge is power. It is better to be well briefed before starting negotiations so you have the best possible advantage.
If you would like to discuss your circumstances further in confidence, please call me on 0800 029 1229 or email me phil@thedivorceifa.co.uk
Tags: Divorce, Pensions, Pensions & divorce, What am I entitled to? | Posted in Pensions & divorce |
Comments: No Comments yet!
Posted May 26th, 2011
Once a divorce is concluded there is often the temptation to tidy up your financial matters immediately as a fresh start. But could this inadvertently cause potential issues later which could be avoided?
For example, it is common for people to consolidate pensions into one scheme (perhaps a SIPP) without too much thought to the consequences. But if the existing scheme is subject to a pension sharing order then under the legislation it is not possible for another pension sharing order to be placed against it.
By transferring away to a new arrangement this “protection” is lost and should the client get divorced again there is a potential for this new scheme to have a pension sharing order placed against it. There is also the same issue when clients’ purchase annuities at retirement.
So would it be an idea to consolidate before settlement so that the protection of the pension sharing order remains.
If you are considering your options post divorce and would like some advice, please do not hesitate to contact me on 01204 663904 or email phil@thedivorceifa.co.uk
Tags: Consolidate, Divorce, Financial, Options Post Divorce, Pension Sharing, pension sharing order, Pensions, Settlement, SIPP | Posted in Pension Sharing |
Comments: No Comments yet!
Posted May 12th, 2011
I am pleased to announce the availability of a financial planning tool for Divorce.
For the first time I have access to a divorce financial planning tool which will enable my clients to see how different settlements will affect them before agreeing to settle. For example, it is able to show the financial consequences of offsetting versus pension sharing or attachment. It can handle maintenance situations or map what happens if one party keeps the marital home and the other the income. Each scenario can be plotted against the other to show which is the most optimum and guidance can be given on the consequences.
I am not aware of any other such planning tool available in the UK and I believe it has particular relevance to Collaborative Law. You can view a dashboard screenshot of the software here which frankly does not do it justice but it gives a decent indication of how visually the software looks.
Effectively, what you are seeing is the two clients’ capital and income positions side by side and as any change is made (e.g. an increase in capital shared to one party) the visual picture changes showing how each client is affected.
It is a superb aid to informed negotiation and agreement.
If this is something you are interested in, please do not hesitate to contact me on 01204 663904 or email phil@thedivorceifa.co.uk
Tags: Collaborative Law, Divorce, Divorce Financial Planning, Divorce Financial Planning Tool, Financial Planning | Posted in Financial Planning |
Comments: No Comments yet!
Posted April 1st, 2011
In the last few weeks an increasing number of clients have approached with pension sharing orders which need implementing as the existing scheme is not prepared to offer an internal transfer and they do not know what to do.
They themselves are members of final salary pension schemes (usually Public Sector) and have found out at the last moment of the divorce that their existing pension scheme will not allow their pension share to be transferred in.
So what next? - The pension transfer has to go somewhere and it is up to the client to set up a new pension arrangement to accept the transfer.
If this is you and you would like advice from a Resolution Accredited Independent Financial Adviser on how best to approach the implementation of your pension sharing order then call me on 01204 663904 or email – phil@thedivorceifa.co.uk
Tags: Divorce, Final Salary Pension Schemes, internal transfer, Pension Scheme, Pension Sharing, pension sharing order, Pension Sharing Orders, Pension Transfer, Resolution Accredited Independent Financial Adviser | Posted in Pension Sharing |
Comments: No Comments yet!
Posted March 11th, 2011
Sometimes I am staggered by the enquiries I receive and the lack of knowledge and understanding shown by the pension trustees and companies involved in divorce towards the spouse. This one involved the Local Government Pension Scheme and highlights what can happen when the information provided to the ex-spouse is incorrect.
“I have a share of my ex-husband’s LGPS pension which I am very grateful for. He will receive his pension at 60 – 3 months before my 60th birthday. Although I have received (incorrectly as it now seems)information for 6 + years stating that I would receive my “share” at 60, I have now been told that the scheme only pays out at 65 unless I take a substantial reduction. If we had still been together this money would have all been paid at my ex’s 60th. I am only able to work part-time due to health issues. I am 54 now and struggling somewhat. I will have to take my pension at 60 regardless. I have no other income. Is there anything at all I can do? It seems so strange that something meant to even out financial situations should discriminate so much. Thank you for your time.”
This issue has a name – income gap syndrome – and it refers to the fact that the existing member will receive his pension benefits at age 60 but the pension credit member cannot access her pension on the same terms until age 65. She has to take a reduction to draw it at 60. Therefore, there is a gap which should be bridged. However, it was too late to go back as the pension sharing order had been implemented and she confirmed:
“I will take the pension credit at a reduced rate when I am 60. It is just so unfair that the LGPS sent me incorrect information which I based my future plans on.”
So check exactly what is being offered in terms of your pension sharing benefits and when they will be paid!
If you would welcome some assistance on your pension sharing options, please feel free to contact me on 0800 092 1229 or email me phil@thedivorceifa.co.uk
Tags: Divorce, Income Gap Syndrome, Pension, Pension Sharing, Pension Sharing Options, Trustees | Posted in Pension Sharing |
Comments: No Comments yet!
Posted March 7th, 2011
“As a result of divorce, I have a pension sharing order and will have £123,000 to transfer into a pension fund. I do already have a Standard Life Personal Pension with just a few hundred pounds in it. I’ve now got the next 3 months to set up a pension fund so I want to ensure that I find the right pension.”
Following on from my previous blog this is an example of why checking – what type of pension scheme is involved and finding out what the pension sharing options are – is so important. The client was under the impression that she had to transfer the benefits externally and was worrying about investments, charges, etc.
Once I had established that the scheme involved was the Police Pension Scheme I was able to advise her that the only option available was an internal transfer. The decision making was over and it was a relatively simple exercise implementing the pension credit within the Police Pension Scheme.
Why wait until the pension sharing order has been agreed before finding out what your options are?
If you would welcome some assistance on your pension sharing options, please feel free to contact me on 0800 092 1229 or email me phil@thedivorceifa.co.uk
Tags: Divorce, internal transfer, Pension, Pension Fund, Pension Sharing, Pension Sharing on Divorce, Pension Sharing Options, pension sharing order, Personal Pension, Transfer | Posted in Pension Sharing |
Comments: No Comments yet!
Posted November 8th, 2010
I was approached this week by a lady wanting to know whether she could share a pension which she thought might be in the Pension Protection Fund (PPF).
The scheme in question, the Turner & Newall Pension Scheme, applied to go into the PPF in April 2006. Despite four years passing this pension scheme has not been transferred into the PPF which for the lady in question was good news.
This is because under current legislation a pension in assessment for the PPF can have a pension sharing order implemented against it whilst one that has transferred into the PPF cannot. This might seem ridiculous but it is to do with the “pension rights” changing to “compensation payments” after acceptance into the PPF, hence a pension sharing order cannot be applied.
There is good news on the horizon though; the PPF should be in a position from next April to implement pension shares for schemes which have transferred with effect from April next year (assuming that the draft legislation is implemented).
So if your divorce involves a pension which is in assessment for the PPF or is already in the PPF the timing of a pension sharing order is important. For more information on this issue, please feel free to contact me.
Tags: Assessment, Compensation Payments, Divorce, Pension, Pension Protection Fund, Pension Rights, Pension Scheme, Pension Shares, Pension Sharing, pension sharing order, PPF, Turner & Newall, Turner & Newall Pension Scheme | Posted in Pension Protection Fund |
Comments: No Comments yet!
