Emily Cannell, partner and head of family at Mincoffs Solicitors, advises on the key factors older couples should consider if thinking about a separation.
As life expectancy continues to increase and there is no longer a stigma surrounding divorce, it perhaps comes as no surprise that divorce rates in older couples have reportedly been on the rise.
‘Silver divorce’, ‘grey divorce’ and ‘silver separators’ are all terms that have been used to describe the divorce of people who are in the later stages of their life, often after many years of marriage.
The divorce process is the same regardless of age or length of marriage. When it comes to finances, the starting point for the division of assets in a long marriage is one of equality for both parties, however this may not be possible in all circumstances. There are several factors which may be particularly important to consider in a ‘silver separation’.
Pensions
‘Silver separators’ are likely to be retired or approaching retirement and therefore one of their most valuable assets may be their pensions. Ensuring that both spouses have enough pension provision to provide them with an income sufficient to meet their needs will be a priority. After a long marriage, it is often considered fair for spouses to equalise their pensions.
There are a few ways to approach pensions on divorce. If there is a disparity in value, it may be appropriate for parties to enter into a ‘pension sharing order’ whereby rights in a pension arrangement are divided on divorce. Alternatively, pension assets may be offset against other assets, for example, one party may wish to remain living in the family home in lieu of receiving a smaller proportion of their spouse’s pension. What is a fair outcome will very much depend on individual circumstances.
To assist with determining the most appropriate way forward, full disclosure of both spouse’s financial circumstances (including pensions) will be required. It will also be necessary to understand what state pension the parties may qualify for and when they will be due to receive this income.
Pensions can be complicated assets and accurate advice will also likely require the assistance of a pensions expert, known as a pension actuary.
Family home
Another important asset to consider is the family home. Generally, there are two ways that the home is dealt with on divorce; one spouse may buy the other out of their interest in order to remain living there, or the home is sold, and the equity split between them.
If the property needs to be sold, both spouses will need to rehouse. Those approaching retirement age may be unable to secure any borrowing, meaning a future property may need to be purchased on a mortgage-free basis. Older couples may also have additional needs to consider, such as assisted living now or in the near future.
Inheritance
Protecting inheritance for younger generations may also a priority and the ownership of the family home should be considered early in the separation. If the home is owned as joint tenants, it may be advisable for the beneficial ownership to be changed to ‘tenants in common’ at the Land Registry. This means that the property will not pass automatically to the other owner if one spouse dies and instead their share will pass in accordance with their will.
Whilst divorce does not revoke an existing will, it will change certain elements. The will remains valid, however it is important to note that if there is anything in a will relating to an ex-spouse, it will be treated as if they had passed away.
It is therefore advisable that wills be reviewed after a couple separates to ensure wishes reflected are still accurate.
Taking the steps to end a marriage is often one of the most difficult decisions a person has to make, but engaging a solicitor early on can help you to consider all of your options from an informed perspective.
For confidential, trusted advice about divorce and finances, contact Emily Cannell on ecannell@mincoffs.co.uk, or visit www.mincoffs.co.uk/services/family-law