Difficult Situation - Parents Divorcing
Discussion
As above - aged 66 & 60 my parents have decided to divorce. Very sad and all that, but that’s not the purpose of this thread.
I’m a bit concerned as to how they (my father in particular) are going about splitting the financial elements of their now defunct marriage, and want to make sure my mother isn’t being poorly advised, as hard as it may be for me to intervene if needed.
So, they’ve accepted an offer on the family home which is in joint ownership, so she’ll get 1/2 of that.
My father always earned significantly more than my mother (when she worked) so the significant majority of their pension income is from his employment, which is where the fun seems to start.
He has a number of pensions, including one SIPP which is worth circa £125k. My mother’s own pension entitlement is £6k p/a from her teachers pension until her state pension kicks in.
My father and his solicitor (who he is trying to suggest they both use?) is suggesting that as a settlement, the SIPP for £125k gets transferred to her and she reinvests / draws down against that as she needs - all sounds ok so far.
However, he and his solicitor are then saying that he keeps the rest of his pensions, which would give him an annual payment of circa £70k. He has said that if they touch this, the value of the pot would be cut by 50%.
This is the bit that doesn’t sit right to me as from her £125k pot my mother is going to get an annual payment of nothing like £70k.
I’ve told her she needs to get some independent advice before she does anything else which my father is saying they don’t need to do and can resolve themselves. I would appreciate any insight from here - I’m not particularly clued up on pensions at all.
I’m a bit concerned as to how they (my father in particular) are going about splitting the financial elements of their now defunct marriage, and want to make sure my mother isn’t being poorly advised, as hard as it may be for me to intervene if needed.
So, they’ve accepted an offer on the family home which is in joint ownership, so she’ll get 1/2 of that.
My father always earned significantly more than my mother (when she worked) so the significant majority of their pension income is from his employment, which is where the fun seems to start.
He has a number of pensions, including one SIPP which is worth circa £125k. My mother’s own pension entitlement is £6k p/a from her teachers pension until her state pension kicks in.
My father and his solicitor (who he is trying to suggest they both use?) is suggesting that as a settlement, the SIPP for £125k gets transferred to her and she reinvests / draws down against that as she needs - all sounds ok so far.
However, he and his solicitor are then saying that he keeps the rest of his pensions, which would give him an annual payment of circa £70k. He has said that if they touch this, the value of the pot would be cut by 50%.
This is the bit that doesn’t sit right to me as from her £125k pot my mother is going to get an annual payment of nothing like £70k.
I’ve told her she needs to get some independent advice before she does anything else which my father is saying they don’t need to do and can resolve themselves. I would appreciate any insight from here - I’m not particularly clued up on pensions at all.
Sorry to hear this, never nice and terrible at their age.
Mum and Dad need to each complete what is called a 'Form E' and submit this to the Family Court. Ancillary Relief (the division and payment of marital funds) does not really start until the Form E is submitted - especially on marriages the length (I presume) you parents had (they may have got married last year for all I know!).
Given your parents age and the demographic when they were younger (and assuming you are the eldest and that they were married before you were born) your will be around 35 to 37 years old and the marriage would have been a year longer than this.
Your Mum can therefore expect a pension sharing order that will give her a third to a half of your Dad's pension entitlement (minus any private pension entitlement she has).
They should not use the same solicitor.
The settlement being put forward by your Dad and his solicitor is absolutely terrible for your Mum. Half of the house is her's under law anyway. This is not a negotiation point. If she is not after any other form of maintenance then a pension sharing order is required.
Your Dad's solicitor will soon change his tune, you do need to protect your Mum (the court will also help in this).
Try and get them to agree with this. It is very easy to spend many tens of thousands in the family courts - and this all goes to lawyers. Your Dad obviously has over a million in his pension.
Mum and Dad need to each complete what is called a 'Form E' and submit this to the Family Court. Ancillary Relief (the division and payment of marital funds) does not really start until the Form E is submitted - especially on marriages the length (I presume) you parents had (they may have got married last year for all I know!).
Given your parents age and the demographic when they were younger (and assuming you are the eldest and that they were married before you were born) your will be around 35 to 37 years old and the marriage would have been a year longer than this.
Your Mum can therefore expect a pension sharing order that will give her a third to a half of your Dad's pension entitlement (minus any private pension entitlement she has).
They should not use the same solicitor.
The settlement being put forward by your Dad and his solicitor is absolutely terrible for your Mum. Half of the house is her's under law anyway. This is not a negotiation point. If she is not after any other form of maintenance then a pension sharing order is required.
Your Dad's solicitor will soon change his tune, you do need to protect your Mum (the court will also help in this).
Try and get them to agree with this. It is very easy to spend many tens of thousands in the family courts - and this all goes to lawyers. Your Dad obviously has over a million in his pension.
Julian- thanks for the words and your input.
Bit further background;
- Married in 1988, so this year would be their 30th wedding anniversary.
- 3 kids, I am the oldest but my father isn’t by birth father although in both of our eyes he is. I am 33 and was 3 when they married. Youngest is 21.
My mum is the one who is being a bit naive here - in her own words she doesn’t want to take my father to the cleaners, but in my eyes he is very clearly protecting his interests so she needs to start looking after herself.
Bit further background;
- Married in 1988, so this year would be their 30th wedding anniversary.
- 3 kids, I am the oldest but my father isn’t by birth father although in both of our eyes he is. I am 33 and was 3 when they married. Youngest is 21.
My mum is the one who is being a bit naive here - in her own words she doesn’t want to take my father to the cleaners, but in my eyes he is very clearly protecting his interests so she needs to start looking after herself.
tleefox said:
Julian- thanks for the words and your input.
Bit further background;
- Married in 1988, so this year would be their 30th wedding anniversary.
- 3 kids, I am the oldest but my father isn’t by birth father although in both of our eyes he is. I am 33 and was 3 when they married. Youngest is 21.
My mum is the one who is being a bit naive here - in her own words she doesn’t want to take my father to the cleaners, but in my eyes he is very clearly protecting his interests so she needs to start looking after herself.
Hang on in there and support your Mum.Bit further background;
- Married in 1988, so this year would be their 30th wedding anniversary.
- 3 kids, I am the oldest but my father isn’t by birth father although in both of our eyes he is. I am 33 and was 3 when they married. Youngest is 21.
My mum is the one who is being a bit naive here - in her own words she doesn’t want to take my father to the cleaners, but in my eyes he is very clearly protecting his interests so she needs to start looking after herself.
30 year marriage is going to get a close to 50% pension sharing order. Your Mum is being completely fair about this and should be commended for her stance. However, she should not be disadvantaged because of it.
The house (as I said) is not negotiable - she already owns half of it so there is no gift/giving there.
All the children are now adults, so that really does not matter either (at the end of the day).
Your Mum has two choices: Maintenance (which ties your Dad up forever) or a Clean Break divorce (which means your Dad transferring assets to your Mum but having no responsibility thereafter).
I would advise on a clean break every time. No one has to revisit the situation and both Mum and Dad have absolute certainty.
PM me if you like.
Cheers
Edited to delete the random line at the end!
Edited by JulianPH on Sunday 27th May 09:20
As long as what your mum gets is fair and reasonable, she'll have a clear conscience. Whether your dad views it as fair is another matter as he'll see it as 'his' money.
Definitely need separate solicitors though. As professional as they may be, 1 person can't possibly act in both parties best interests. Unless your dad meant use the same firm but a different solicitor? The only benefit of that is that it might make things quicker, but I'm sure they'd still have to send each other letters.
Definitely need separate solicitors though. As professional as they may be, 1 person can't possibly act in both parties best interests. Unless your dad meant use the same firm but a different solicitor? The only benefit of that is that it might make things quicker, but I'm sure they'd still have to send each other letters.
I am dealing with finances for an insurance claim and I know its different (and the numbers are smaller!) but the initial offer was a joke, yet the insurer acted like they were doing me a favour. Never dealt with anything like this before but they are playing hard ball and its only when you really push they fold and make an actual reasonable offer.
I guess that's whats going on here. They know your goal is 50%. They will do their best to stop you getting there.
As above to get 70k pension the pot is going to be almost £2,000,000. Offering £170k is a joke but when they come back with 500k you might be very tempted and thus the solicitor saves his client 1/2 mil! IYSWIM
I guess that's whats going on here. They know your goal is 50%. They will do their best to stop you getting there.
As above to get 70k pension the pot is going to be almost £2,000,000. Offering £170k is a joke but when they come back with 500k you might be very tempted and thus the solicitor saves his client 1/2 mil! IYSWIM
red_slr said:
As above to get 70k pension the pot is going to be almost £2,000,000. Offering £170k is a joke but when they come back with 500k you might be very tempted and thus the solicitor saves his client 1/2 mil! IYSWIM
Feels like OP’s mum needs to understand these numbers; she may then realise how much she is at risk of being taken to the cleaners herself, and will then realise she needs a good solicitor!! I bet she would be over the moon with 500k, but I bet she is entitled to more....Well done to the OP for recognising that she needs the support, and hopefully can take your guidance too!!
You need to insist she gets independent advice. You are obviously trying to do right by both of them, but I can see this very quickly looking (to your dad) like you are siding with your mum. Getting a solicitor to do the dirty work will protect your mum's interests and allow you to retain good relations with both parents.
Thanks all for the input thus far.
I've explained to her that the £70k p/a pension my father is looking at relates to an asset of between £1.5 - £2mill, which has very much bought the chickens home in terms of the "real value" of the £125k which they have "suggested" she gets thus far.
The only other thing I'm not sure on is the point which he has made regarding the value of the "pot" being diminished if they play around with it - is anyone able to shed any light on this - is this likely to be the case or is this another yarn being spun to try to get her to accept the £125k?
I've explained to her that the £70k p/a pension my father is looking at relates to an asset of between £1.5 - £2mill, which has very much bought the chickens home in terms of the "real value" of the £125k which they have "suggested" she gets thus far.
The only other thing I'm not sure on is the point which he has made regarding the value of the "pot" being diminished if they play around with it - is anyone able to shed any light on this - is this likely to be the case or is this another yarn being spun to try to get her to accept the £125k?
tleefox said:
As above - aged 66 & 60 my parents have decided to divorce. Very sad and all that, but that’s not the purpose of this thread.
I’m a bit concerned ..
I would be surprised if a solicitor would ever expose him/herself to an allegation of contravening a conflict of interest. Your mum should get her own counsel, but this need not be confrontational and/or expensive. Many solicitors now subscribe to a softer form of mediation, and I am sure that all parties would also be sensitive to the matter of age.I’m a bit concerned ..
Your mum's counsel would, I am certain, be up to speed on matters such as the Duxbury Rules, a table that takes into account assumed investment growth and inflation, and age etc, and then arrives at a non mandatory sum which may be offered by way of a settlement proposal. One criticism of Duxbury is that it aids a younger divorcee in much the same way that someone young who was erroneously transferred from a final salary pension is liable to more restitution, than a more elderly person, so things are never as cut and dry as they seem. If your mum has a net annual income needs in the range of, say, £'x', her 'tariff income' from the courts might be £'x' to make up the shortfall. This might be vital if she has no capital resources. But be mindful of the deduction of tariff income from any state benefits that she might be entitled to. I'm not suggesting that she game the system; rather, that she identifies her objectives first, before negotiations start, and certainly before you task the actuary. The clarity of your tasking instruction for the actuary is absolutely vital.
The main reason for this being that the Duxbury tables do have limitations and are relatively static, and are calculated each year using a single set of assumptions (inflation/marginal tax-rate/returns etc) and therefore may not allow for the ‘real’ financial outlook of someone like your mum. So, when you instruct a solicitor, make sure they use a financial adviser or an actuary who understands the nuance required - especially in the current climate where inflation is running ahead of short term bank deposit returns (I'm assuming that your mum has no desire to be exposed needlessly to the vagaries of equity markets). This would clearly have an impact on the amount she would require at outset in order to address her financial needs for the thirty or forty years.
Get a decent team. Take your time (measure twice/cut once etc) - this is as much about finesse as it is black and white numbers on a page. I had a great negotiation with an opposing party barrister recently. Coiffured, leggy and blonde she came up to me in the Court carpark, smoking a cigarette, and nodding to both parties, said "So, what will it take to make this go away?". I told her and her demeanour changed. She scowled and said "You are having a laugh?". I shrugged, and said "Let's ask the judge". We did, and we did ok. Our client's life was transformed. That was a very good day indeed, it took three years and a lot of time and patience to get there, and an hour on the day to resolve it. But we got there. Your mum will get weary and she will need you. Play the long game, I don't envy you juggling parents. Your role will be vital - especially if your dad is being a little possessive over 'his' money.
Finally, remember - any settlement can affect state benefits your mum receives - make sure she has clarity about her objectives at outset. She might decide, for instance, to offset income/capital in favour of bricks and mortar.
https://classlegal.com/books/at-a-glance
I've been divorced twice, one in the UK massive conflict, sorted in my favour became a war of letters between solicitors on fee. second time was in Norway where we sat down and roughly agreed then went to ONE solicitor, who advises you both on an equitable settlement. It was great we had a good settlement where I could look after my kids, never had any issues, If you can get a solicitor to agree to take you both as clients I'd recommend it. In fact I'd vote for it being a mandatory first step in any divorce.
Thread update for anybody interested, as things have taken 2 unexpected turns since the initial separation.
Without going into too much detail, the first turn was that my father entered into a relationship with an ex work colleague almost immediately after the initial separation. I always had my suspicions about this and confronted him about it when they originally separated, as did my sisters, and he outright lied to all of us that nothing was going on with her.
This was bad enough, but the second turn was that he wrote to her some months ago outlining a strategy as to how he was going to get rid of my mum so that they could be together (a letter which she found) and apologising for hurting her in the past.
The financial impact of this is that in said letter he was promising to give her half of whatever house he buys when all of this moves on, and basically free access to all of his money.
The good thing to come out of all of this is that obviously my mother is in absolute bits, but has been forced into taking proper advice as to what she is entitled to financially.
Without going into too much detail, the first turn was that my father entered into a relationship with an ex work colleague almost immediately after the initial separation. I always had my suspicions about this and confronted him about it when they originally separated, as did my sisters, and he outright lied to all of us that nothing was going on with her.
This was bad enough, but the second turn was that he wrote to her some months ago outlining a strategy as to how he was going to get rid of my mum so that they could be together (a letter which she found) and apologising for hurting her in the past.
The financial impact of this is that in said letter he was promising to give her half of whatever house he buys when all of this moves on, and basically free access to all of his money.
The good thing to come out of all of this is that obviously my mother is in absolute bits, but has been forced into taking proper advice as to what she is entitled to financially.
Awfully sad when 30+ years of marriage ends in such a way. Your 'father' seems to be devoid of any guilt and empathy.
He knows full well what he should do, as a man and a human being.
Although thoroughly unpleasant for your mother, I'm glad the situation has developed in a way that galvanises her resolve and shows her husband's true colours.
Good luck.
He knows full well what he should do, as a man and a human being.
Although thoroughly unpleasant for your mother, I'm glad the situation has developed in a way that galvanises her resolve and shows her husband's true colours.
Good luck.
Not sure if relevant but many years ago zi chaired the pension committee of a very large Canadian company.
We regularly got into appeals when a pensioner died. Worked for 30 years(say) married for 20 to wife 1 and 20 to wife 2. Who got the survivor benefits. ? Sometimes pensioner forgot to change beneficiary for instance.
Pension pots in a defined benefit plan are not cash to my knowledge so the split is of the benefit over time I would have thought.
When I divorced my first wife I went for a clean split. Transferred all assets to her and about 50% of my income for five years plus child support after that. A lot of money.
The quid pro quo was a complete break and no future claims against future earnings or pensions. It was a good decision.
We regularly got into appeals when a pensioner died. Worked for 30 years(say) married for 20 to wife 1 and 20 to wife 2. Who got the survivor benefits. ? Sometimes pensioner forgot to change beneficiary for instance.
Pension pots in a defined benefit plan are not cash to my knowledge so the split is of the benefit over time I would have thought.
When I divorced my first wife I went for a clean split. Transferred all assets to her and about 50% of my income for five years plus child support after that. A lot of money.
The quid pro quo was a complete break and no future claims against future earnings or pensions. It was a good decision.
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