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Divorce in Later Life

Karin Walker, Founder of KGW Family Law, explains the issues of specific concern for family lawyers acting for ‘silver splitters’

Karin Walker, Solicitor and Founder, KGW Family Law

As the marriage rate falls and the majority of 'millennials' choose to cohabit, the over 60s top the divorce charts. There are several reasons for this growing trend.

Couples who married in the 1970s often did so at a very young age. Cohabitation was less socially acceptable at that time and therefore marriage, particularly for those in their late teens or early 20s, was commonplace.

As the average life expectancy increases, those who are now reaching retirement age see themselves as having twenty-five to thirty years ahead of them. The sedentary lifestyle associated with retirement is no longer attractive.

Individuals change radically during adult years and often move in different directions, resulting in a level of incompatibility, which was not prevalent at the time of marriage. Life expectations and values change along with interests and social interaction. In some marriages these factors may compound and make separation likely.

Very often one party is the protagonist, the other being more content with the more traditional move towards retirement.

As a consequence of all of these factors, the 'silver separators' are fast becoming the most likely age group to consider divorce. This age group have very specific issues, which require resolution on separation, meaning that those advising them need an understanding of and ability to deal with those issues to construct, or advise on, a satisfactory outcome, taking account of future requirements.

The emotional fallout after a long marriage is inevitably more extreme and more likely to have a demonstrable and lasting effect on either or both of the couple, even if in different ways.

Pensions and future income derived from pension will have a significant impact alongside general income issues post-retirement. Division of pension on divorce is sadly a growing area of negligence claims for family practitioners and a clear understanding of the potential pitfalls and how these can be covered is essential.

Either or both of the couple are likely to have received an inheritance during the course of the marriage and there may be a need to unravel inherited wealth.

One of the couple (or even both) may have a new partner who may be younger and may have their own children. This can add to the financial complications and the uncertainty of the future.

How to deal with the emotional fallout after a long marriage /relationship

Particular emotional issues for the 'silver separators' are as follows:-

• The couple are each in a completely different place. One is looking at new horizons and a change in lifestyle whereas the other is focussing on retirement/grandchildren etc.

• The difficulties experienced by adult children when their parents separate including the potential loss of a 'home base'.

• One of the couple may have had no involvement at all in the family finances and need to re-educate or rely on professional advice.

• Expectations with regard to future standard of living and how this should be provided?

• Will one or both of the couple work beyond retirement age, and what effect does this have?

• The impact of a new partner and a new family.

• Possible health issues.

In this age group, perhaps more than any other situation, the decision to separate is driven by one of the couple. The discovery that your life partner, to whom you may have been married for in excess of 40 years, wants to bring the marriage to an end and move in an entirely different direction can be devastating and even emotionally disabling. The communication of such decision can, in itself, have a major effect. Adult children often take their parents' separation very badly as it can rock the very essence of their own security and stability even if they no longer live at home.

If you are acting for the protagonist of the relationship breakdown you need to encourage them to give the other party time to come to terms with their decision.

Sometimes the couple will be unmarried. They may have lived under the misapprehension that a 'common law' wife has rights. It is vital to explain this invidious financial situation with clarity.

It will be extremely important as a family lawyer right at the outset to understand:

• exactly what the position is on the part of your client;

• how emotionally able they are to give instructions;

• to what extent you will need to encourage them to view the position from the perspective of their spouse and work at their pace;

• what sort of additional professional advice might be beneficial to your client or indeed the couple and how might that be provided;

• whether a tactical approach to the process might be just as important as providing sound and pragmatic legal advice.

Initial meetings with new clients in this age bracket can take longer than usual. In most cases one party will not want to divorce. Whichever of the couple is your client, this is something which you will have to take on board and work with. Even if your client appears to be taking the initiative they may be doing so reluctantly.

Whatever the particular facts of the case might be, separating couples in this age group will be shrouded in an emotional situation which will require more than just legal knowledge and skill to navigate toward a successful outcome.

Below are some of the particular issues which may arise.

Pension issues

The failure to provide proper information and deal appropriately with the issues surrounding pension sharing on divorce is probably the principal growth area for negligence claims in family law. Scarily there are now organisations to whom you can take your court order and pension sharing annex(es) and they will evaluate (for a fee) whether you might have a negligence claim against the lawyer who represented you.

The report of the Pensions Advisory Group dated July 2019 is a 'must read', probably for all family practitioners but definitely for those acting for clients in this age bracket.

The essential stages when dealing with pensions on divorce are set out in the report as follows:-

• Gathering of information in relation to all pensions, including state pensions

• Careful review of whether any of the 'complicating factors' may be present (there are 26 listed in the report)

• Review of the valuation figures and whether they are reliable and reasonable

• Service of applications on the pension fund trustees

• Consideration of whether an expert report is needed

• Finalising the approach to, and particulars of, valuation and division of pension assets

• Completion of key court forms

• Seeking pension administrator approval

• Consideration of when to apply for Decree Absolute

• Implementation.

As the report says, 'ignoring the pensions or agreeing to ignore the pensions is not an option'. The same could be said for the report itself!

Particular issues for couples over the age of 60 are:-

• One of the couple may hold the majority (if not all) of the pension provision – and consider it to be 'theirs'. This could include a final salary scheme.

• There may have been insufficient pension contributions made during the marriage to support the couple living together during retirement, never mind living separately.

• One or both of the couple may have made pension contributions which pre-date the marriage and which they believe should be 'ring-fenced'.

• Insufficient state pension contributions may have been made by the party who did not work. This is something which should always be considered at the commencement of the case – and is often overlooked.

• Exceeding the threshold for lifetime pension contributions and the tax implications. The allowance for 2020/2021 (state pension being excluded) is £1,073,100.00.

• A desire to 'offset'.

Adult children and the extended family

When you are acting for the 'silver separators' their adult children may quickly become one of the very difficult and complicated aspects of the case.

Whereas younger children tend to be less impacted by the separation of their parents than often the parents might believe, this is often not the case when the children are already over the age of eighteen. The potential issues are numerous and can have a major impact. Things to look out for are:-

• The child who 'takes sides' and wants to support one of the couple.

• The child whose predominant concern is the loss of financial support from either or both of their parents.

• One parent is leaving the marriage to commence a relationship with a new partner who has children of their own (who may be under the age of eighteen and therefore financially dependent).

• The child who is concerned by a potential loss of inheritance.

• The 'adult' child who has not yet left home.

When parents separate in later life their own financial requirements are likely to change. Sadly human nature is such that financial changes can often bring out the worst in everyone involved. Adult children who had certain financial expectations can both suffer and behave badly.

It can be very useful, as a family lawyer, to draw a family tree and identify exactly what the relationship is between all of the extended parties involved in the case. An idea of everyone's age is also helpful. This will enable you to advise your own client on not only their own needs and entitlements, but also their obligations to others (including their children) and what impact the acquisition of future obligations might cause. Parents all too often assume that their adult children can 'cope' with their separation when, in reality, this can be very far from the truth. The lawyers involved will need to discuss carefully the potential issues with their clients in order to raise awareness.

Inheritance issues

Inheritance or inherited wealth can cause difficulties for 'silver separators' from two different perspectives:-

A) Almost certainly by their stage in life they will have inherited from their own parents or other relatives – or one of them will have done so. This inherited resource may have been 'intermingled' into the family finances, perhaps forming part of the purchase price for the family home or funding the cost of improvements; perhaps meeting the cost of school fees or expensive holidays and other luxury items. Alternatively, the inherited resource may have been 'ring-fenced' in the form of a property held in the sole name of one spouse or an investment portfolio.

B) The couple will be looking to regulate their own affairs and deal with their own inheritance planning. These arrangements may be turned upside down as a consequence of their separation.

Once again the first meeting with the client is so vitally important. The need to gather extensive information at an early stage impacts on so many areas which will be potential issues for this couple separating in later life. Essential questions relate to whether or not inheritances have already been received by either or both of the couple, and the purpose to which this resource has been put. What are the potential sources of future inheritance and for whom?

The death of either party prior to the conclusion of divorce proceedings

When acting for a couple in later life the possibility of the death of either of the couple is a situation which could arise. You will therefore need to have particular regard to the following:-

• Should Notice of Severance of Joint Tenancy be served? This may not be automatic as you may wish to consider your client's position in the event of the death of their spouse?

• Should a will be made immediately in contemplation of divorce?

• What is the position with regard to life policies/death in service benefit?

What happens if one of the couple should die prior to the conclusion of divorce proceedings? If a final decree of divorce has not been pronounced (decree absolute), the divorce proceedings stop. The couple remain married and the status of the survivor is that of widow or widower. The division of matrimonial property will cease and the widow/widower will benefit under the terms of any pension provision.

Very careful consideration needs to be given where financial arrangements have been implemented in part. A binding agreement which is clearly contractual would need to be honoured. Otherwise resources will pass under the terms of the deceased's will or the intestacy rules.

Income issues in later life

The source of income through retirement years is an important consideration in later life in any event. It was only by 2018 that all employers had to enrol their eligible workers into a workplace pension. Where only one of a couple might be working, or where reliance had been placed on downsizing the family home to provide additional income in retirement the level of income available to share on divorce may be insufficient to maintain the lifestyle expectancy.

It is important at the outset to consider the state pension provision and whether a 'top up' is possible. This is so often overlooked.

At the other end of the spectrum has the threshold for lifetime pension contributions been exceeded so that tax will be payable?

This is undoubtedly an area where the assistance of a financial advisor may be of considerable benefit.

Where income is insufficient and one party continues to work beyond retirement age, might a maintenance order be appropriate? Would this be reasonable?  A clean break is not an inevitability but, nevertheless, something which the court 'must' consider.

The impact of the new partner

Either party to the marriage may have or become involved with a new partner.  This will inevitably have an impact. 

A new partner may be the catalyst to bring an already ailing marriage to an end.  Alternatively either spouse may meet a new partner post-separation. 

A new partner may have income in circumstances where the income of the couple is inadequate to meet their ongoing income needs.  To what extent can this have a bearing?  The new partner has no obligation either to support the spouse who is in a relationship with them nor the spouse from whom their own new partner is separating.  This can cause difficulty and resentment. 

The management of the family dynamic can be extremely important.  The new partner may have children of their own.  Those children may be dependent.  If one of the couple moves in with a new partner with dependent children they may find themselves becoming financially responsible for the needs of those children which could cause a problem for their own (adult) natural children.

The imposition of a step-family brings its own problems.  Loyalties inevitably become divided.

There is of course no reason to hide a new relationship.  A disingenuous approach can only have an adverse effect.  Whilst upfront honesty may bring about short term retribution it is without doubt the best way forwards. 

In practice

When a couple of this generation separate it is usually the decision of one and the other's world may suddenly and devastatingly fall apart. 

If you are acting for the protagonist they will no doubt have given their situation careful consideration.  One of the first steps which you will take is to manage expectations.  Your obligation may be to proceed as expeditiously as you can.  Regrettably this could give rise to the need to issue Form A, if for no other reason than to set a timetable.

You will however need to have some regard to the emotional position of the other spouse.

If you are acting for the spouse who does not wish the marriage to come to an end, you need to manage their emotional needs as well as their involvement in the divorce process.  You will need to encourage the other side to proceed at the pace which works for your client. 

The support of a family consultant may be invaluable. 

The emotional elements of the case will become an integral part of the negotiation process.  On both sides it is essential to have a clear understanding of your client's objectives and what is motivating them.  The need to explore the costs incurred as a consequence of the adoption of any course of action, especially where costs might arguably be expended unnecessarily, and where resources are tight, is also vitally important.