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Topic:
Treatment of prr-marital defined benefit pension on divorce (24 Posts)
Started By:
Date:
31 October, 2016 10:33AM
Treatment of prr-marital defined benefit pension on divorce
Wayne72 - 31 October, 2016 10:33AM
Hi. I have a defined benefit pension from prior to my marriage. I am looking at transferring that pension (which is linked to cpi) to a self investment pension plan to take advantage of the spiralling value of defined pension schemes (due to the collapse in rates). However I am also seemingly edging towards divorce, so before transferring out of the DB pension into a SIPP i would like to know whether my pension gets bundled into the divorce settlement if 1) i remain within the db pension scheme and 2) i transfer to a SIPP. Thanks
Re: Treatment of prr-marital defined benefit pension on divorce
davidterry - 31 October, 2016 04:03PM
It makes no difference whether it is a defined benefit pension or a SIPP when it comes to divorce proceedings.
Re: Treatment of prr-marital defined benefit pension on divorce
Wayne72 - 31 October, 2016 04:08PM
Thanks..but thats it is a pension that pre-dates my marriage, does it get bundled into a settlement? (Regardless of whether kept in the db or the sipp structure)
Re: Treatment of prr-marital defined benefit pension on divorce
Andyk - 31 October, 2016 05:08PM
If it was accrued before you were married then generally it is deemed to be excluded from the pot
Re: Treatment of prr-marital defined benefit pension on divorce
davidterry - 31 October, 2016 05:33PM
>>If it was accrued before you were married then generally it is deemed to be excluded from the pot

Don't count on that. It might be but very much depends upon individual facts. There is a very big difference between the following two situations.

1. Husband and wife are aged 35. Married/cohabiting two years. Only pension is husband's built up exclusively in the ten years before they met. Husband's pension is very likely excluded from the pot.

2. Husband and wife are aged 60. Married.cohabiting 20 years. Only pension is husband's built up exclusively in the ten years before they met. Extremely unlikely that husband's pension will be excluded from the pot.

Individual circumstances matter a lot and in this context things like age, length of the relationship and whether any spouse suffers a disability may well matter more than when the pension was built up. There are no fixed rules but there are general principles to be discerned.
Re: Treatment of prr-marital defined benefit pension on divorce
Wayne72 - 01 November, 2016 10:50AM
Many thanks indeed
Re: Treatment of prr-marital defined benefit pension on divorce
Monty - 03 November, 2016 10:59AM
In my case the whole pension ended up being considered, even though 30% of it had accrued prior to marriage... It all depends on the overall set of circumstances.
Re: Treatment of prr-marital defined benefit pension on divorce
Wayne72 - 03 November, 2016 11:52AM
Makes sense thanks
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 04 November, 2016 10:53AM
This must be the best site on the internet that I have found, very impressive.
From the age of 18, I have had a pension, which I have transferred from one company to my next company into their final pension scheme which I left 9 years ago.
It is a deferred pension and is substantial.
I met my current wife ( I am now 58 and she is 57) just after, 9 years we have been married ( well, deduct 5 years if no touching, affection and in separate bedrooms, but I know this counts for nothing!) So, online advise varies. Some say that as I haven’t touched the pension it is mine ( which I what I thought when I got married, but never checked, very silly I know) and others say she might get 50% of the increase in value it has achieved in 9 years ( which is a lot)
I know nothing is black and white here, but what is the most likely outcome here?

We had a deed of trust 80% me/20% her but I guess I’ll be giving her half.

Many thanks
Re: Treatment of pre-marital defined benefit pension on divorce
davidterry - 04 November, 2016 11:05AM
The problem you face is your ages. If you were both aged, say, 40 and you had built up all your pension before you met your wife there would have been a good chance that you would have kept your pension intact. However, because of your current ages there is obviously limited time for either of you to build up substantial pension provision for the future. This will especially be so if, say, your wife does not work or has a low income. If, say, she was a consultant with the NHS future pension for her by you would be less important but if she has limited pensions of her own and/or does not work or has a low income then those facts are likely to count for more than the fact that your pension was acquired before you met.

That is not to say that you should not argue that your pension should be excluded. On these facts you have respectable grounds for that argument. You certainly do not have to concede the point in negotiation. If you were very lucky you might win the point in court. However, realistically speaking the factors I have mentioned are likely to weigh with a court. A fall back position that you were prepared to share the increase in value in your pension since you have been together might be a compromise that would work. It does, though, very much depend upon what other pension provision your wife has and what her foreseeable needs are going to be in the not too distant future.
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 04 November, 2016 11:23AM
Gosh, thank you so much for such swift and informed feedback!
I did have a feeling that the age thing might be slightly against me. It's crazy that I have always thought my pension as before we met, no children etc could ever come up in a divorce settlement ans was always mine but that's my fault for not checking.
She does have a pension but it is very small and she has a job that she has been in for many years but again, the pay is half of mine ( as long as I dont lose my job as precariuos at moment)
Even if i was to concede to the 'increase in value in 9 years' subject to getting the value at 2007, as I know the current CETV, then 50% of that increase could be £250K - seems crazy to me but I guess I can only arge the case and pray?

Thanks again
Re: Treatment of pre-marital defined benefit pension on divorce
davidterry - 04 November, 2016 02:33PM
>>Even if i was to concede to the 'increase in value in 9 years' subject to getting the value at 2007, as I know the current CETV, then 50% of that increase could be £250K

Those figures just make it more likely that your wife would get a share. The division of assets upon divorce does tend to follow the Marxist dictum of 'From each according to his ability, to each according to his needs'. Of course, the courts would deny that but if you look at outcomes that about sums up how it works.
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 04 November, 2016 03:39PM
I'm not sure I fully understand this but I can see it now on another of your site pages.
Does it mean that as the pension value is so large, that it makes it more possible that my wife can get 50% of the CETV increase ( or even more than this??)
I had earmaked the cash sum payout when I take ( my) pension to help my 3 children with the deposits on houses but I dont think the court will care abou this.

I wish your offices were closer!

Thanks again
Re: Treatment of pre-marital defined benefit pension on divorce
davidterry - 04 November, 2016 05:31PM
>>I had earmaked the cash sum payout when I take ( my) pension to help my 3 children with the deposits on houses but I dont think the court will care abou this.

No, it won't. And for what it is worth that is not simple cussedness on the part of courts. It is just that the criteria they have to take into account are laid down by Parliament and those criteria do not include a factor like this.
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 04 November, 2016 06:12PM
Yes, I do realise of course and I apologise if if I am coming over badly, but I think it's pure frustration of it all. I'm sure I'm not the first man like this ( or woman) I have learned more on here today, than all the other online sites and I'm afraid a local solictor I saw Thursday, who didnt seem to be aware of most of this and tought I'd probably keep my pension. Like I said, it is a real shame you aren't closer to me and could act on my behalf, as knowing all the facts must end up in cleaner and best result for me in the end.

Many thanks
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 05 November, 2016 10:53AM
One last thing if I may, as I might call you on Monday. This would be considered a clean break yes as nobody has mentioned spousal maintenance, not one person or online?
I only ask as I paid all the bills/food etc for the house and her money was her own use and for 2 or 3 holidays around the world ( many places) with her family and kids.

Thank you
Re: Treatment of pre-marital defined benefit pension on divorce
davidterry - 06 November, 2016 05:12PM
It is a clean break when no spousal maintenance is payable. If there is a pension sharing order ad there is no spousal maintenance that is clean break. What will determine in this case whether spousal maintenance is payable is whether your wife works and what her income is compared to yours. Assuming that she has an income which is sufficient to meet her needs there would be no obvious reason for spousal maintenance. On the other hand, if your wife does not work and you have been supporting her financially throughout the marriage you would find it difficult to obtain a clean break from a wife of this age.
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 06 November, 2016 05:39PM
You really are incredibly helpful, plus its a Sunday! yes I think that pretty much makes sense. After 9 years ( with 5 years of no real marriage, but that doesn't count I know) and no children, she'll possibly get 50% of the house that was 80/20 from me, the 50% of the increase in value of my pension (earned from age 18) for the last 9 years...and possibly some maintenance.
She earns £16K a year plus overtime as she enjoys the friends and job, I earn double that ( and far less than my pension earning days as an exec in London) but the job has been in dour circumstances for 2 years.
She wont get maintenance after all of the above, fact as I'll leave if that ever comes up.

On other thing, I have a pension cash in form and from a fee weeks ago. I am taking advice on it of course.
If I cash it in, so that I can get cash to help me move near my parents ( as I have been planning for a couple of years and it's in Dorset, so a much more expensive area than I moved to the East Midlands ) would this then fall into my estate to be considered? If so I can't move!.... thanks
Re: Treatment of prr-marital defined benefit pension on divorce
mesteve - 06 November, 2016 05:50PM
Plus I don't think that it is unreasonable for her to cut down on her jet setting around the world 3 times a year, currently in Australia, and use some of that saving on maintaining herself like she used too ( and in lot of debt ) before she met me.
Unless the law has gone mad. I have read your page for men on your site.
Re: Treatment of prr-marital defined benefit pension on divorce
davidterry - 10 November, 2016 06:19PM
Bearing mind that there are no children and that your wife has an income from which she should be able to support herself I think she should be a clean break case.

You would be unwise to buy another property unless and until you and your have divorced and you have settled the financial issues arising from the divorce formally and finally within the context of that divorce. Unless you do it that way you may well find that your wife makes a claim against whatever you may happen to have. And regardless of whether that claim has merit or not there is a lot of hassle and expense involved which could be avoided if you sort out financial issues between you formally and finally before making any future financial commitment.
Re: Treatment of prr-marital defined benefit pension on divorce
mesteve - 10 November, 2016 07:10PM
Thanks so much for the continued advice, quite amazing.
This does all seem to make sound sense to me. I guess the issue I have now, is that my wife asked me to get the property on the market asap, while she is on holiday in the USA, which I have and have the first viewing tomorrow. I'm guessing that if we sell quite quickly, she can buy her new home, once we agree the % split as I can't make a claim on her. So I would need to make other living arrangements until the court order and divorce is through.
I don't even know if she's filed yet

One other thing. If one see's a solicitor and apponts them, and they say they will write by email to summmarisr the meeting and advise on the cost and write a new will, what is a reasonable amount of days to wait?

Thanks again
Re: Treatment of pre-marital defined benefit pension on divorce
mesteve - 20 November, 2016 01:52PM
Hello, it's me again. You seem to make more sense than solicitors in my area in Northampton.

I know this is nearly 'how long is a piece of string' but solicitor's costs.

For a non contested settlement with my wife and me as the respondent and her the petitioner ( she hasn't filed yet, and back from a very long trip in the USA tomorrow) so I need to ask her to do it.

I spoke to one solicitor, they said about £1,500 to £2,000. Her partner fee was £170 per hour
I then went to another who is a partner, £230 an hours but seemed very thorough.

However, when I received her letter, it stated as estimate of $5,000 plus VAT, so £6,000, I nearly fell of my chair.
On questioning, and telling her the other quote and pointing out a section in their budgeting pack, that stated £2,500 plus VAT ( so £3,000) she then reworded the estimate to £5,000 ( including VAT) and moved a couple of the disbursement costs under the £5,000 estimate to make it £3k plus paying my wife's costs and court fee to get near to the £5K.
Clearly not a good way to start business when budgeting so has thrown me a bit.

What is approx fee here do you think, where both me and wife agree a settlement and use solicitors for advice and they do the consent order?
Clearly, top major companies and London based charge more.

Also, why is the petitioner costs, estimated at £1,200 to £1,400 so much lower than the respondent ( as above and which I will have to pay) as it doesn't make sense to me?

Thanks again



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Re: Treatment of prr-marital defined benefit pension on divorce
Monty - 24 November, 2016 05:03PM
How long is a piece of string... I went into this process like you - largely non-contested, and just the financials to sort out which we could do reasonably. Thought it might cost about £6k-£8k... I haven't actually added up the complete cost to absolute, but it was several times that, driven by an inability to agree a financial settlement that went as far as FDR hearing in court with barristers. I'm not trying to alarm you but you have to consider that even if you consider you are being reasonable, your wife might take a different view, and the costs can spiral quite quickly. And solicitors will only offer estimates, not a fixed fee for the job!
Re: Treatment of prr-marital defined benefit pension on divorce
mesteve - 29 April, 2017 08:40PM
Hello, well after a few months, my wife and I are still getting on really well. We have shared financial information between us, well mainly me to her and I have most of the assets. We have both bought our house, and are moving at the end of May. I paid for her house, gave her some cash plus £100K ( 12%) from my pension and £300 p/m maintenance.

She has just been to her solicitor to file for divorce as we agreed, and she has made a bit of a thing about disclosure of finances, as she hasn’t seen a Form E, an my wife to sign a disclaimer but still proceeding ( neither of us wanted to wade thought 27 pages) and my solicitor seems relaxed on not doing the Form E, even though she would have preferred them I think.
I’m more than happy for my solicitor to send hers my CETV, pension cash sum and gross pension, P60 etc to hers etc, but my wife said not to bother. She is happy with what we agreed and even said she would complain if the judge over rode it ( odd I know, but true, as he thinks I have been more than fair)

I believe my solicitor mentioned a Form D81 being done a little later on.
Can I just ask, is there anything that can back fire on me on is not doing the Form E when it comes to the judge “stamping” the divorce and agreement?

Many thanks
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