Pre-nups and pension sharing
Following the launch of a consultation by the Law Commission on whether pre-nuptial agreements should become legally binding in England and Wales, a lawyer has warned that this could result in limits being placed on pension sharing orders.
Janet Brown from Sackers is reported in Professional Pensions this week saying that there will be massive consequences for pensions and divorce should pre-nups become legally binding.
If pre-nuptial agreements result in existing pension assets being protected within any future divorce settlement, pension sharing orders could be limited to the accumulation of retirement benefits during the period of the marriage.
This is effectively already the position in Scotland.
Pensions are sometimes overlooked when couples are getting divorced, with the ex-spouse instead focusing on the division of property, maintenance for children and spousal support.
This approach deals with the present at the expense of the future.
When advising on pensions and divorce, we always encourage clients and their solicitors to think carefully about their financial needs both now and in the future.
Retaining ownership of the marital home and receiving a monthly maintenance payment for a finite period of time can leave a divorcing spouse financially exposed in later life, if they have not had the opportunity to rebuild their own retirement funds.
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