How to split assets on divorce
Family lawyers Judith Buckland, Tamara Glanvill and Kate Butler talk to Dave Harries from Communicate TV about the options for dividing assets on divorce.
Dave Harries: One of the big issues in divorce, I imagine, is the issue of assets and splitting those assets and getting a fair settlement, whatever that might be. It can be very confusing I imagine, whether you are going to take pensions for example, or go for property or money or whatever it is. So how Judith do you think that that sort of thing can be dealt with by solicitors?
Judith Buckland: Well, in many cases those assets do exist, there is property, there is capital - maybe in savings, there is a pension. The starting point has got to be really for an individual – what is your priority? Just as a generalisation, the younger somebody is you may well find that it is more important for them to maximise the capital or secure the property and not really worry quite so much about the pension which might not be as big because they haven’t been working that long, and obviously isn’t quite so relevant because they are not of that age. Whereas for somebody in their 50s and 60s it is going to be much more important. So you have got to look at each one individually and find out what is most important to that client, what their greatest needs are and then try and find a solution that fits their purposes.
Dave Harries: And Tamara, do you think it is always obvious for an individual case which of those assets if you like, they should try and get more of?
Tamara Glanvill: No, I think circumstances sometimes dictate, so for a young mother for example, housing needs are going to be her absolute priority and so in those cases quite often, there will be more of a likelihood that she will take her share, whatever that may be, as equity in the house rather than as a pension share. But I think in the past there has been a huge tendency on women particularly to underestimate the value of the pension and to do a trade, particularly without the benefit of legal or accountancy advice, do a trade of the house against the pension and sometimes that is a really bad trade for a wife to make, so we do help all parties, all clients to make sure they know what all of these assets are worth before they start making those sorts of decisions.
Judith Buckland: I think that is important actually because many people don’t really realise that their pension is often their biggest asset.
Dave Harries: And Kate, presumably another issue that is going to be tricky here is the fact that assets, particularly pensions, sometimes it is difficult to know what they are going to be worth in 20 to 30 years’ time.
Kate Butler: I mean it is important to remember that you are not always comparing like with like – money that is tied up in a property isn’t the same as cash that is in the bank, isn’t the same as pension money which you may not be able to get your hands on until you are in your 60s potentially. So I think the thing to remember is that you shouldn’t focus too much on each asset individually, you need to look at the overall picture, and the overall picture needs to be fair and that is quite a difficult concept to get your head around if you don’t have the benefit of someone who has experience in looking at how particular assets may be offset against each other. It may be in a lot of cases that equalising the pension after a longish marriage is absolutely right, but that doesn’t necessarily mean that we will equalise what happens to the property as well. So it is really, really important to think about the overall picture – not just each individual component.