DIVORCE IN LATER LIFE - 55 AND OVER
5th February 2021
The over 55’s are leading the way in new divorce enquires this year.
One of the reasons for this is that as the average life expectancy increases, those with retirement on the horizon see themselves with at least another 25-35 years of good living ahead of them.
People change dramatically during their adult years and often in different directions to their partner, resulting in the couple growing apart. This is often only realised when children have left home, a life phase commonly referred to as “empty nest syndrome”.
Life expectations and values change, along with interests and social interaction and this can often lead to separation and/or divorce.
The over 55’s have very specific issues, different from those of other age groups, which require resolving on separation. Those legally supporting the 55’s and above need an understanding, and an ability to deal with, those issues.
The emotional consequences of the breakdown of a long marriage are often more extreme and complicated.?
Pensions and future income will be serious and pressing issues to deal with. It is likely either or both parties are likely to have received an inheritance during the course of the marriage and so there may need to be an unravelling of the inherited wealth.
Given how easy it is to meet new people online, it is likely one or both of the partners may begin a new relationship, who may be younger and may have their own children. Adding to the financial complications and uncertainty of the future.
There are 8 specific areas that are more relevant to the over 55’s facing separation and/or divorce.
1 - How to deal with the emotional fallout after a long marriage.
Often, the longer the marriage, the more issues arise with more uncertainties and more heightened emotions.
Particular issues that can be a concern to the over 55 age group include:
1. Both individuals are likely to be in a different emotional place to each other. One may be looking at new opportunities and changes in lifestyle, whilst the other may be focusing more on a relaxed time in retirement and spending more time with the family.
2.The impact on adult children of their parents’ separation and be a serious issue to be dealt with, including the possibility of a loss of their home base.
3. If one individual has had no involvement in the family’s finances during the marriage, they may need to (re-)educate themselves or rely on professional help.
4. Expectations of the standard of living for each individual post-separation and/or divorce can be a major issue to address, along with how this can be funded fairly.
5. Working beyond retirement age may be an issue to be considered or now a necessity.
6. The impact of any new relationship and new family units may be one which all parties have to come to terms with.
7. There may also be age-related health issues to consider.
In the over 55’s the decision to separate is usually driven by one partner, rather than it being a mutual decision, and can be particularly devastating on the other partner.
How the decision is communicated to the other partner sets the tone for the separation and/or divorce. It can also have an emotionally disabling effect on any adult children, even if they are living independently.
I specialise in providing legal support and coaching for the over 55’s facing separation and/or divorce. Often the initial meeting can be lengthy and emotionally difficult, even if I am helping the partner whose decision it was to separate.
My clients require more than just legal knowledge and skill to navigate the divorce process toward a successful outcome. They need tactical, pragmatic and sound legal advice. But it’s not all legal speak!
I help them decide how to approach issues with their partner to keep things as calm as possible. It may be they have to give on some issues more than they would like in order to achieve the overall outcome that’s best for them. I can advise from start to finish.
They may also need additional professional advice and support along the way.
2 - Pension Issues concerning the over 55’s getting divorced
It is essential that all the information relating to any pensions held has been obtained from the correct sources including the state pension.
A careful review of the pension information must then follow taking into consideration up to 26 recognised complication factors that may be relevant to the situation.
A review of the valuations of the pensions and whether these are reliable and reasonable is also necessary. It may be necessary to commission a specialist report from a pensions expert.
Most of the pension assets may be held by one partner and they no doubt will consider it “their” asset. Or the pension may include pre-marriage contributions which they pension holder believes should be ‘ring-fenced’ for them. Changes to the state pension mean that a wife who did not work and stayed home to care for the family can now no longer rely on her husband’s National Insurance contributions to ensure that in her retirement she receives a full state pension.
There may also be tax implications with regards to the pension assets that need to be explored and mitigated where possible.
Many mature couples who decide to separate but decide not to get divorced may face pension issues and hardship, should the partner holding the majority of the pension assets die before a divorce is obtained.
Ignoring or agreeing to ignore pensions isn’t really a sensible option. Even agreeing to offset may not be a sensible or viable option long term, even if it is attractive at the time of separation and divorce.
3 - Adult children and the extended family
Older children can be more affected than younger children by their parent’s decision to separate.
Some of the issues parents need to be aware of are as follows:
An adult child can often take the side of one parent. They may be concerned about the loss of financial support from either or both parents.
An adult child will often have concerns where one of their parents leaves the marriage to be in a relationship with another person who has children of their own, especially when those children are under the age of 18 and therefore financially dependent.
An adult child may be concerned about the potential loss of any future inheritance.
An adult child who is living at the family home at the time of their parent’s separation will have many concerns to be dealt with. Sadly, issues around money bring out the worst in many people and it often manifests itself in bad and selfish behaviour.
I make it a point of understanding the family tree and dynamics, allowing me to identify and discuss with my client the potential issues they may face with regards to their adult children.
4 - Inheritances
The 55+ age group almost certainly will have, between them, have received an inheritance.
This inherited wealth may have been “intermingled” into the family finances, funding home improvements, discharging debts, etc or it may have been “ring-fenced" and kept separate such as in a bank account or as an investment portfolio.
In addition, or alternatively, their own inheritance planning may have been thrown into disarray because of the separation and/or divorce. It is important detailed information is obtained by the legal advisor as early as possible.
Ideally in the first meeting and factored into the overall divorce strategy.
5 - Death of a partner before the decree absolute
If one partner dies before the divorce is finalised there can a number of complications which can have both an emotional and monetary cost to the remaining partner, and possibly any new relationships which have been formed. Therefore, the chance of this occurring, however, remote it may seem, should be made a part of the overall divorce strategy.
Some of the issues a legal advisor should discuss with their client at the first meeting are:
1. Whether to sever the joint tenancy in respect of the jointly owned family home or any other property.
2. Whether to make a Will or review an existing Will.
3. The position regarding life or pension death benefits, or death in service benefits.
6 - Income Issues in later life
The same income that supported one household and lifestyle now has to split to support two. Sadly, sometimes there is an insufficient amount in the pot to maintain two households or at least not at the same standard of living as the couple previously enjoyed during the marriage.
This may be for a variety of reasons but is often because the couple planned to downsize the family home and use the capital released to fund their continued lifestyle in retirement.
This requires creativity on the part of the legal advisor. Considering whether the State Pension can be topped up is one option. Another may be that one or both of the couple is able to work beyond retirement age. The shortage of income may make a clean break unfair and impractical, meaning the couple remain financially connected post-divorce; a position which many separating people would wish to avoid if at all possible.
Where there are sufficient funds, it is important to consider the relevance of the threshold for lifetime pension contributions and whether this has been exceeded so that any tax liability is known and factored into the financial settlement.
It is important that the legal advisor has good financial experts with appropriate union qualifications to assist with this element of the financial discussions.
7 - The impact of a new relationship
Given the ease of meeting new people online, many separating couples find that they are finding a second chance of happiness with someone else and sometimes this is before the divorce is concluded and the financial terms agreed.
The existence of a new relationship cannot be ignored when considering terms of any financial agreement. The fact the new partner has an income may be relevant when there is insufficient matrimonial income to maintain the two separate households of the couple.
Whilst the new partner has no obligation to support the person they are in a relationship with and certainly not the other spouse, they can be expected to contribute toward the household of the partner with whom they are in a relationship with. This can cause difficulty and resentment to both parties albeit in different ways.
Further complications exist where the new partner has children of their own especially if they are financially dependent. The spouse moving in with a new partner in these circumstances may find that they become financially responsible for the new partner's children in a roundabout way and this may cause conflict and resentment with adult children of the separating couple.
Management of the new family dynamics is extremely important, and this is where it is vital that the legal advisor appreciates that divorce is not just a legal process.
We cannot help when we find a new partner and fall in love, but if you find yourself in this situation, what you must not do is try and hide the new relationship.
It is vital to let your legal advisor know so they can discuss any implications of the new relationship on the terms of the financial settlement and exercise damage limitation if needs be. After all, it’s their role to protect you legally and seek the best outcome for you.
8 - Don’t overlook the formalities
Often couples after a long marriage want to reach an amicable settlement and they sometimes think that the way to achieve this is without involving legal advisors.
They agree how they are going to divide their capital, assets and income, etc and then go their separate ways. They don’t have the terms of the settlement they have reached recorded in a formal document and endorsed by the court so that the terms of the financial settlement is final and legally binding on them both.
This is the biggest mistake a couple could make. It creates uncertainty and doesn’t provide financial security. It also prevents any sharing of pension benefits which may later be lost on the death of the pension holder.
As each person builds their new life, their attitude to their ex and all the circumstances are likely to change, potentially creating conflict and resentment years down the line. This can lead to trying to resolve complicated issues, which could all have been avoided if the correct legalities had been deployed at the time of the separation.
Sarah
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