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Divorce FAQ – Part 5
What happens to a pension in a divorce?
Your pension is a marital asset, like your home and other assets. The value of your pension will be taken into account in deciding a fair settlement.
Practical solutions can include:
- Offsetting the value of one spouse’s pension fund by transferring a lump sum, or other assets, to the other spouse. It should be noted that pension assets are not considered pound for pound with other capital.
- Splitting the pension fund into two separate pension funds, one for each spouse, known as a Pension Sharing Order.
- Arranging that when a pension comes to be paid, a proportion of it is paid to the other spouse, known as Pension Attachment. This is rare in practice.
It is often advisable to obtain expert advice from a Pensions Actuary in relation to offsetting and pension sharing options.
Should I make a new will on divorce?
Usually yes. When you get divorced, your ex-spouse is automatically excluded from your will as either a beneficiary or executor (this is not the case if you have merely separated). Unless you draw up a new will, this can have undesired consequences.
For example, your original will might have been drawn up on the assumption that your spouse would take care of the children using the money left to him or her.
With the ex-spouse excluded from the will, you might now want to arrange an appropriate trust to hold the inheritance for the children. More broadly, you may want to alter the way assets are shared among the various beneficiaries.
If you want your former spouse to continue to be a beneficiary, you must draw up a new will. In some cases, the financial settlement you agree when you divorce may require one or both of you to make provision in your will for your ex-spouse and any children. This might be appropriate, for example, if you are paying continuing maintenance.
Note also that if your ex-spouse remains dependent on you, in some circumstances it may be possible to challenge your will if it does not make adequate provision for him or her. Your own wishes are more likely to be followed if you draw up a new will that takes this into account.
If you have any queries regarding a matter similar to this, then please do not hesitate to get in touch with our experienced team of family law solicitors in Exeter on 01392 207020.