Beware of the Pension Share 31st, March , 2018

Pensions and Divorce

Alongside marital property, pensions tend to be the biggest assets that require to be dealt with when you separate from your spouse. It is extremely important not to lose sight of the importance of such an asset when considering how best to divide the matrimonial finances as it can have serious financial implications on both sides.

A traditional example of that importance can be seen where the wife stops working to have and bring up the children, leaving the husband to continue working. Over time the husband continues to accrue pension benefits whilst the wife does not. The law as it applies in Scotland provides a spouse in that situation with redress in the form of a Pension Share.

What is a Pension Share?

As the name suggests, a Pension Share is where one spouse shares a proportion of their pension with the other spouse. When the pension holding spouse comes to retire the other spouse receives their share by way of a pension credit into their own pension policy. The Pension Share is a specified sum rather than a %.

How are pensions valued on Divorce?

Any pension, be it private or work-related, that has been paid into during the marriage requires to be valued. The pension(s) is valued from the date of marriage to the date of separation. Any payments into a pension pre-marriage or post-separation are not included in the calculation. We obtain the figures from the pension provider. Some providers will apportion the figures for you whilst others will only provide the date of separation value. A calculation has to then take place using the date of marriage to ensure the figures are accurate.

What happens when we have the figures?

Along with the rest of the matrimonial assets and liabilities, we ascertain how the assets and liabilities should be dealt with and either record who is getting what through a Minute of Agreement (Separation Agreement) or obtain a Court Order if necessary.

We cannot emphasise the importance of obtaining full advice where pensions are concerned. Please contact us to arrange a free consultation. 

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