I am heartened by new research from the Marriage Foundation which says that contrary to myth, second marriages have a better chance of success with 31 per cent ending in divorce compared with 45 per cent of first marriages.
Traditionally, an individual appoints a solicitor to represent their best interests and give them advice on divorce. Working with solicitors and their clients, I am frequently asked to prepare a pensions report where the aim is to equalise pension income at retirement. Pensions often present a challenge because they can be difficult to understand and the valuation may not accurately reflect the true worth of the pension income at retirement. This is particularly the case with public sector and military pensions. Advice may also be required regarding pension options on divorce – this may be a simple division of the pension, or the value of the pension may be traded against the value of the family home or another asset.
Recently, following the withdrawal of legal aid for most matrimonial cases, many couples are now considering family mediation to explore options for settlement of both arrangements for children and the family finances. Mediation is focused on looking to the future in a constructive collaborative manner. Whilst not suitable for everyone, it can help reduce the acrimony often associated with the ending of a marriage, as well as potentially saving time and money.
As a financial planner with significant experience working in an impartial manner, I have seen the value of mediation for resolving the financial arrangements. The starting point is usually to deal with the family home and any restructuring of the mortgage. This may require the release of one party from the mortgage to allow the other party to remain in the property.
A pensions report is often required in mediation to give clients the confidence to explore options, de-mystify the jargon, as well as ensure that valuations are fair, particularly where apples are being traded with pears. There may be investments and life assurance to deal with, requiring due regard to valuation, risk, and underwriting considerations.
Furthermore, it may be appropriate for one spouse to pay maintenance to support the other and any children for a period which may require a series of financial projections to quantify the need and the cost. As with financial planning in other areas, getting the right financial advice on divorce can help an individual to rebuild their finances and look to the future.
[Matthew Clark, Western Morning News, 2 May 2013]