Silver Splitters – Financial Concerns When Divorcing After 60
There has recently been a flurry of books and articles discussing how to embrace life after 60. From the Financial Times, Life Begins At Sixty – the rise of the ‘young-old’ society to Extra Time – life lessons for an ageing world by Camilla Cavendish, society seems to have caught onto the reality that, for those of us lucky enough to reach 60, we have the potential to enjoy two to three decades more of healthy, productive life.
For many of my clients, reaching their late 50s/early 60s is the end of many eras. Children have reached their 20s and are living their own lives. Elderly parents have passed away. Suddenly, the caring responsibilities that took up so much time in their 30s and 40s have vanished. Couples who may have spent 15 to 20 years like “ships passing in the night” in between work and family commitments, suddenly find themselves with a stranger.
And worse still, perhaps one they don’t particularly like.
Older people are divorcing more
Figures from the Office of National Statistics (ONS) show that although divorce is on the decline, older people are calling time on their marriage with greater frequency. Between 2005 and 2015 the number of men divorcing aged 65 and over went up by 23% and the number of women of the same age divorcing increased by 38%.
My clients who decide to leave their spouse later in life have very different concerns to those who separate in their 40s. Chiefly, there are no child arrangements to negotiate. For some, divorcing over 60 often feels like their last chance at happiness, hence their main concerns are freedom and finances.
Pensions
A key question asked by divorcing people over 60 is how their pension will be divided. Unlike younger couples, older people do not have the time to build up another ‘war chest’ for their old age; therefore, it is imperative they keep/obtain as much of the matrimonial pension as possible. Contrary to what many think, private and/company pensions can be deemed matrimonial property, even if one spouse did not contribute financially to it.
The three most common ways pensions are divided upon divorce are:
- Off-setting - one party keeps the pension and the other takes a larger share of the other marital assets (such as the family home)
- Pension sharing – this is where the pension is divided into two portions
- Pension-earmarking – each party waits until the pension pays out and splits it between themselves
To ensure fair valuation and division, your Solicitor will work with an accountant or valuer to prepare a Pension Sharing Report.
Property
Many older couples have an additional property, either in the UK or abroad, as well as their family home. Dividing these upon divorce can be emotionally distressing, especially if years of time and effort have been spent creating the ideal residence.
As a member of Resolution, I firmly believe in couples coming to an arrangement regarding their financial settlement outside of Court. Doing so has the advantage of keeping legal costs and stress under control.
The first task is assessing what is ‘matrimonial property’. In White v White Lord Nicholls defined matrimonial property as “the financial product of both parties’ common endeavour”. If you acquired a home or assets prior to marrying your spouse, this may be classed as separate property and therefore not subject to being shared with your spouse.
The starting point for any division of matrimonial property is equal sharing. However, Solicitors and the Courts must take into consideration the factors listed under section 25 of the Matrimonial Causes Act 1973 when deciding whether to move away from the principle of equal sharing. As well as examining the contributions (both financial and non-financial) made by each spouse, and their ongoing monetary requirements, section 25 requires the length of the marriage and age of the spouses to be considered. The longer the marriage, the more likely the wealth tied up in a couple’s property will be shared equally.
One of the first things I check when I am instructed in divorce proceedings involving property is whether the homes are held as joint tenants or tenants in common. If it is the former (which is usually the case), I will apply to the Land Registry to have each spouse registered as tenants in common. The severing of the joint tenancy means the properties are divided into equal shares between you and your spouse. Furthermore, by becoming tenants in common, your spouse will not automatically inherit your share of the property when you die, and you can leave your share to whomever you wish in your Will.
In summary
Divorcing later in life truly is the sad closing of one chapter and for some may be the opening of a great window of opportunity. By ensuring you have expert legal advice and representation, you can achieve a fair financial settlement, enabling you to embrace the next chapter of your life without having to worry about money.
Author: As co-director and head of family law, Shabana Sultana has over 20 years’ experience in family law and high-net-worth divorce. To book a free phone consultation with Shabana, please call on 020 3753 4667 or email
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