Divorce can be a very stressful event.
Adding to the complexity around the financial considerations is the sharing of pension benefits.
Most people find this subject at best boring and at worst totally confusing.
Understandably therefore both parties to the divorce are inclined to lean heavily on the advice and guidance of their professional advisers.
And when it comes down to pensions and divorce those professional advisers should include both a Solicitor and a Chartered Financial Planner.
Take a recent client situation as an example.
The divorce had been finalised and the lady in question had been granted a share of her ex-husband’s pension fund, a Self Invested Personal Pension (SIPP) in this case.
The process of course took rather a long time and the values that had been used at the negotiation stage had changed quite a lot between then and her receipt of the Pension Sharing Annex.
Her share of course always being expressed as a percentage of the fund value. The negotiation stage involving the calculation of values is known as the ‘Valuation Date’.
The SIPP scheme administrator and the ex-husband’s adviser were arguing that the percentage calculation should be as at the date of the Decree Absolute. But this is wrong it is at the ‘Valuation Day’ on which the value is calculated (a date within four months of the scheme getting all the documentation and fees they require).
In our clients case the value at the ‘Valuation Day’ was worth an extra £50,000 to her. Well worth paying for professional advice in our opinion.
Photo credit: Flickr/marc falardeu
