As opposed to what many people may think, there is a lot to be worked upon and balanced in the event of a divorce and this gets even more tricky when the divorce was a long standing one and more so if there is a pension involved. However, many people tend not to pay attention to the pension but there are more than enough reasons as to why people should make sure that they consider pensions in the advent of a divorce. This somewhat of a guide should shed light on what pension is and why to most people it should can be quite essential.
What is a pension?
For those that might not be very conversant or sure about what entails a pension, it is an investment that is made earlier in life so as to cover the investor once they hit their retirement age. There are different types of pension schemes that one can invest in and there are different avenues that can be used but the most common is where an employer puts up a pension scheme for their employees who can then take out the money and invest it wherever they like.
Why is Pension important in the event of a divorce?
There are a number of reasons as to why one should pay extra attention to the pension in the even that a divorce is inevitable and this is more so the case if the marriage was a long running one. One of the reasons is the fact that the pension in most cases is usually the largest asset that a family has. In most cases, this is by far larger than the family home which can attract quite some attention. With the help of a good family lawyer, you should be able to get to an agreement more so considering the fact that the pension can also in most cases be used as a bargaining chip. Furthermore, this could be the key to you having a peaceful or peasant like retirement life hence the pension can be quite a determinant.
What if the pension belongs to one of the spouses?
Well, a pension is considered like any other investments that either of the couples and hence this cannot belong to one spouse and have nothing to do with the other. Therefore, on the onset of a divorce, the pension like any other investment goes into the divorce-pot to be equally shared. Regardless of the route that the spouse uses to share the pension funds, it is law that they should do it in the long run and hence one can even use the courts to ensure fair sharing of the same.
When and why does the solicitor or a court of law come in?
The first call that you should make with regards to the sharing of the entire pension is to the family law solicitor. This is because as an expert, he should be able to guide you on the procedure and also knows when to call in the other experts that can be able to help with the case. The family solicitor should also be able to guide you on when to involve the court and more so if you stand good ground to be able to use this platform. However, it is important to do your homework first so that this helps to reduce the cost as well as the timeline.
Where to start with the pension divorce.
The starting point is always a skeptical place since most of the people are not aware of how to go about it. However, the first thing that you should do is make sure that you have all the documents with regards to the pension in an organized manner. Of course, this should be way easier in the event that you and your spouse are in speaking terms. However, if this is not the case, there are a variety of other avenues that can be used to get the required documentation. Among this is that you can request your solicitor to ask for the documents from the solicitor of your spouse and if everything fails, then a court has the jurisdiction to compel your spouse to divulge the paperwork.
It is also especially important to make sure that you enquire from the places that you have previously worked if you were eligible for any pensions and you can also check with the state for any state pensions that you can be legible for. Once you have all the paperwork in order, make sure you file it along with any other documents that might be related to the divorce. This makes the process more time efficient and more so less costly for you.
What are the common terms used and how could they affect the pension on a divorce?
On December 1st 2000 there were new laws that were put in place to make sure that the process of pension sharing was fair both to men and women that relied on their spouse’s pension upon their retirement.
• Offsetting: this is the first term that had been and can in most cases be used in the sharing of a pension. It means that the partner’s-pension is traded against other assets which then gives each of the spouses a fair value. However, there can be a major setback in this procedure especially when the remaining pension is the single largest asset that the couple has.
• Earmarking: in this case, a portion of the whole pension rights are earmarked to be given to the wife or the husband once they have hit retirement. However, the control of the entire pension stays with the member and this poses a few setbacks among them the risk of the member dying and the pension disappearing especially if there was no provision for the ex-wife.
• Sharing: in the new law, courts can consider the option of sharing which means that there can be a clean break. The order is passed by trustees of the pension in which the member receives a debit and the ex-spouse is able to receive an equal credit. It is among the more preferred methods of pension rights splitting in the event of a divorce.
It is clear to see why pension can be a major asset to a marriage as well as quite an attraction in the event of a divorce.