Pensions, Divorce and Death
It’s a complicated state of affairs when an ex partner dies and pensions are brought into the equation – who benefits from the pension - the ex wife or the new wife?
If the deceased has made a new Will after his second marriage and left everything to the new wife there is still the question of whether a pension order dealing with finances has been made.
“When a husband has legally divorced his previous wife it needs to be clear whether an order dealing with finance was made. Both parties may have agreed how they would share assets, but they may not have had that formally recorded in an order,” said divorce solicitor, Lucinda McWatt.
“It is always so important when instructing a solicitor to handle your divorce, to make sure good pension advice is available and that error is all too common when couples attempt d-i-y internet divorces or seek a cheapie quick divorce,” she warned.
Why is getting a financial order important in a divorce?
Many people agree the practical division of finances and assets during the divorcing process but forget to detail the pension agreement in a financial order.
This is really important because until an order is made, the claims which husbands and wives have against each another will remain open.
This means that many years later one party can ask for more money or property from the other.
“When people agree the financial arrangements and obtain an order detailing them, it is usual for there to be a clause preventing claims being made against the estate of the other person under the Inheritance (Provision for Family and Dependents) Act 1975 when one party dies,” added Lucinda.
At Pearson, our solicitors work closely with our financial advisers and we have a pensions experts working in house to make sure these eventualities are dealt with and the appropriate orders put in place.
“Divorce is a big breaking point and for many people a severing of all ties, including financial assets and a clean break is essential, but nothing beats good solid professional advice,” added Simon Taylor, financial adviser at Pearson.
“There was the case of a man who made a lot of money in business after he and his wife divorced however the Supreme Court ruled that despite the fact that the couple had been divorced for nearly 20 years, the wife could proceed with a claim for financial remedy in the family court.
“This is a stark reminder to those divorcees who failed to wrap matters up comprehensively with their spouse at the time of the divorce,” said Simon.
What divorcing couples need to do
Couples should deal with their financial matters at the time of the divorce and finalise them by obtaining a Court Order. This can simply be an Order providing for the formal dismissal of financial claims. An application for an agreed financial Order is usually dealt with as part of the Court’s paperwork and it is not expensive to instruct a solicitor to deal with an agreed Order.
Could the late husband's ex-wife make any other claims on his estate?
Under the Inheritance (Provision for Family and Dependents) Act 1975 a former spouse does have the right to bring a claim against the estate of their ex husband or wife.
They might do so if financial matters arising from the marriage breakdown had not been sorted out, there was no order preventing them from bringing a claim or if they were being maintained by their former spouse at the time of the death.
To be able to bring a claim the former spouse must not have remarried and any claim must be brought within six months of the date of the grant of probate.
Does the husband's ex have any claim on the pensions naming the new wife as beneficiary?
If the husband properly dealt with his pensions by completing a nomination form or expression of wishes form to tell the pension trustees what should happen to the fund upon his death he will have nominated his current wife as the beneficiary. It therefore passes to the new wife and the ex has no claim.
For advice on your divorce, future pensions and how to future proof yourself and your family call Pearson on 0161 785 3500
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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.