DIVORCE
Whether divorce is your choice or that of your partner it is always painful and if you have children there is the added responsibility of their upbringing. Add to that the important decisions which need to be made, regarding your finance, how to cope with the likely reduction in your income and its impact on your quality of life, this can seem a heavy additional burden.

In addition there is the divorce itself and the financial settlement.

Questions you may be asking are:

How to divide any pension benefits
What happens to the family home
Who has the benefits of any endowment policies.
If you are entitled to maintenance how much do you need and how much realistically are you likely to receive.

You know that you will need legal advice and it is important to find a solicitor that you can talk to and who will be helpful in assisting you in obtaining the most advantageous terms in your divorce settlement.

However if you are uncertain of your financial affairs now is the time to start learning about your finance and to seek help if necessary.

Here are some practical tips:
Gather together all your existing policies and make a list of :

The insurance company name
The type of policy
How much you are paying each month
If there is life assurance how much is it for
Who owns the policy, is it in your name, that of your partner or joint names

This may seem an overwhelming task however the information will be required by your solicitor and you never know you may receive some pleasant surprises if you find that there are more savings than you realised.

If you can’t face doing this or really don’t know where to start then contact Morgan Cameron ILP Ltd. when we will arrange to carry out the work on your behalf for an agreed fee.

What next?
If you have any endowment policies you will need details of the current fund and surrender values. These are likely to be different and it is important to obtain both sets of information as the value may be used when sharing the proceeds of your joint finance in your divorce settlement.

For pensions the fund and transfer values are required if you have personal pensions.

If you or your partner are members of an occupational pension scheme then you will need what is called the "cash equivalent" which means the monetary value of the plan.

This will be provided by your pensions administrator.

Contact Morgan Cameron ILP Ltd. if you need help in obtaining the information. We will guide you, telling you what you need to do or if you prefer, for a fee we will carry out the work on your behalf.

Pensions
This is an important area when negotiating your divorce payment.
Legislation cane into force on the 1st December 2000 which has had a large impact on the way in which pensions can be shared. It provides the opportunity for a "clean break" where the pension can be shared with your entitlement being place in your own name.

The new rules are not retrospective therefore will only apply to divorce orders issued after 1st December 2000.

Other pension options are:
Earmarking which is when a proportion of your partners pension is saved until your partner retires.
There are many disadvantages to this type of agreement as you have to wait until your partners retirement before you receive any of the pension benefits this may not fit in with your own retirement plans. It also means that you need to keep in touch with your ex-partner which is not always a welcome thought. If your partner dies before retirement then you may not be entitled to any payment and there is always the difficulty if your partner remarries.

Offsetting is another option where the value of your share of your partners pension is offset against your joint financial assets usually the family home. The disadvantage of this arrangement is that it still does not provide you with a pension at retirement.

This is a brief summary of the various options available with pensions however there may be many other issues to take into account when agreeing your divorce settlement.

For instance if you are receiving maintenance payments it is very important to ensure that your partners life is insured to ensure that on their early death you would receive sufficient money to compensate for the loss of maintenance payments. The same criteria applies to long term sickness therefore it may be necessary to arrange life and income protection to protect your income for as long as necessary.


If you would like to discuss your personal circumstances then contact Morgan Cameron ILP Ltd. when we will provide a friendly service and provide advice to suit your needs.