Silver separators – divorce in later life

Improved life expectancy and quality of life has resulted in a rise in the number of divorcing couples over the age of 65.

Those separating in the later years of their life are likely to be retired, with one of their most valuable assets being their pension(s). They may also have additional needs which must be considered in the financial negotiations.

The value of a pension is often not just the income it produces. For example, it is likely there will be future interest generated by the pension fund and there may also be benefits upon death, such as a widow/widower’s pension which can be a valuable resource. Often, there is a lump available too when the pension is taken. Expert evidence will typically be required to ascertain the true value of a pension.

When agreeing the division of the matrimonial capital, older couples may have additional requirements that need to be considered. They may need to ensure that they have enough capital to fund assisted living or a care home for the later years of their life. They may want to make sure that they have enough capital so that they have a surplus to bequeath to their children by way of inheritance.

Couples who separate later in life may also want to consider whether formalising their separation by divorce is the right option for them.

A divorce legally dissolves a marriage and therefore any spousal/civil partnership pension death benefits are lost once the Decree Absolute is pronounced.

A separated couple might be better off remaining married solely to preserve the pension benefits following death. For example, the benefit of a widow’s/widower’s pension might be necessary to meet one party’s income needs in later life and be so important to their financial security that they cannot afford to lose the status of widow/widower in the event of the other party’s death. If so, a divorce might not be the right way to go but that does not mean that the separation cannot be formalised in a different way.

A couple can remain married but formalise their separation and finances by way of a Deed of Separation. Alternatively, they could seek a Judicial Separation from the court. Each of those options would leave pension death benefits intact.

For more information about formalising your separation and what the best option is for you, please contact family law experts.