Pensions and maintenance after divorce

The issue of what happens to a pension that may have been built up over many years can prove problematic after a divorce and the issue of maintenance may also need to be addressed.

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Having the right financial advice is an absolute must to guide you through the divorce process.  Courts have the power to make orders for all of the different financial issues involved in a divorce including pensions and the payment of maintenance to non working spouses.

The court will divide matrimonial assets according to each partners needs and assuming that any young children will live with the mother. In this instance the wife will usually remain in the matrimonial home which will be transferred into her sole name while the husband will receive other assets – if there are any. He may, for example, retain the full value of his pension. This is known as offsetting.  Once a marriage ends a court can issue a clean break order which means that neither party can claim financial assistance from the other at any point in the future.  

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However, where children are involved in marriage breakdown or an earmarking order is placed against a pension this will not be possible.  Additionally, if there are limited assets and one of the partners to the marriage was a high earner (usually the husband) and the other (usually the wife) not working, it could be claimed that the woman would be unable to support herself and that a request for maintenance be considered.  In such instances an order for maintenance would be for a limited period so that a clean break could be achieved at some point in the future.

During this time it would be expected, not unreasonably, that the wife would equip herself with sufficient skills to be able to return to the jobs market in order to support herself.

If a pension arrangement is involved and an earmarking order is given against the member's pension rights on retirement this would involve a former spouse waiting, in some instances many years for a clean break order to be effected. For this reason this type of order is rarely used to settle retirement benefits.

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