Divorce is not something that only happens to people in their 40's or 50's. Some of the most recent statistics show that divorce rates among the over 60’s is climbing. Factors affecting divorce rates can be anything, from income and financial independence, through to social connection. For retirees looking at a divorce there are some additional concerns to consider.
- Finances may be more difficult to separate. Older couples have been living together longer and may have more shared accounts and investments. Plus, traditional family structures in older generations may have meant one partner generated most of the income/earned most of the pension. These scenarios are not impossible to deal with but can make matters more complicated. The starting point is to make a concise, clear list of all financial assets and details of who currently owns what. It is also important to obtain expert legal advice from a family law specialist as soon as possible.
- Wills should be swiftly rewritten. It’s important to ensure that the current Will reflects individual wishes in terms of who should benefit from assets both during a separation, and after divorce. If there are any life insurance policies beneficiary details should be updated. This is crucial for anyone going through divorce or separation, but particularly important for the over 60’s.
- Pensions are a critical issue. Pension pots can be substantial for the over 60s and dealing with the splitting of pensions will have a big impact on outcomes. Options include a Pension Sharing Order, where pension pots can be divided to ensure each individual has their own pension fund. Pension attachments can also be considered, particularly where one person is older or already receiving a pension. A pension attachment order is an Order that requires a percentage of a pension to be paid on retirement each month or each year to the other person. A couple can also consider offsetting, which means that one partner will take a greater share of pension rights and the other a larger share of other assets in return. It is crucial to obtain expert legal advice about the options for pensions on divorce.
- Property assets must be handled carefully. Over the age of 60 it can be more difficult to obtain a mortgage to buy somewhere new. How capital assets are to be divided may therefore need to factor in funding properties sufficient to meet both parties housing needs.
- Inheritance tax consequences. Although allowances remain the same, a divorce means that a couple loses the right to transfer assets between them free of inheritance tax, which is something to bear in mind.
Divorcing over the age of 60 can be straightforward as long as the right steps are taken. It’s never too late to lay the foundations for a new life, but it is crucial to obtain expert independent legal advice before making any decisions.