I am a 62-year-old housewife. My 40 year old husband has just finished working.
He told me that we have to sell our house because he can no longer pay the mortgage and the bills.
In response, I asked him why, after 21 years of working for his company and earning his retirement, he confessed that he had visited retirement early and that all the money was gone (gambler).
Later that week when he was not at home, I searched his bedroom and found letters from the pension firm, but they were sent to his mother's house.
Retirement savings away: married couples keep assets such as pensions apart, but what happens if a partner throws the money away?
This is the last straw for me and I am now going after a divorce.
The home that we own is estimated at around £ 130,000 with around £ 35,000 outstanding balance on the mortgage.
I just want to know if he should have taken my signature or permission to open his pension early, and although the money is probably completely gone, a judge would grant me a half pension that no longer exists through a higher proportion of equality in the House?
Rhys Taylor is a lawyer who specializes in marriage claims for lenders who practices from rooms in Cardiff and London. He is a co-author of Pensions on Divorce: A Practitioner & # 39; s Guide. He answers:
I am very sorry to hear about your situation and I fear that there are no particularly reassuring words I can offer.
I will discuss the problems you have posed and your possible options below.
Rhys Taylor: It is likely that gambling away all pension savings plans would be seen as a & # 39; deliberate disappearance & # 39;
How spouses own assets in England and Wales
In England and Wales, unlike some other jurisdictions, married couples each have their own assets.
Spouses are free to have joint assets, for example a bank account, but unless they actively opt for joint assets, the starting point here is that each spouse has his own assets.
Your spouse's pension was his own property.
You may have had a number of benefits as a spouse, for example in the event of his death, but they would not intervene until death and not change the primary fact that your spouse's pension was his own, as he pleases.
You did not have to sign anything before he entered his retirement early.
Where can your husband's financial advisor fit into this?
Rather, your question means that this was a company pension with your spouse's job.
If it was a final wage pension, to pay it as he did, he should have received the advice and assistance of a financial adviser, as this is mandatory when such pensions are worth £ 30,000 or more.
He would have transferred his last-earned pension, which would have paid him a guaranteed annual income for life after retirement, to a fixed contribution to a pension fund.
If he already had an occupational pension under a defined contribution plan, or if he was to include it in a fixed contribution plan, he would have had full and unrestricted access to the company from the age of 55.
However, he could have paid a tax invoice if he had withdrawn more than the tax-free lump sum of 25 percent, because the money taken out plus his income would be subject to income tax.
Asset split: Pensions are often worth more than houses (Stock image)
If he collected money before the age of 55, the tax man would have imposed a very heavy fine.
The early payment of this pension seems to have been a very bad life decision for your spouse and it may be (I don't argue higher than that) that your husband might have any recourse against the financial advisor for the quality of his advice that he received (if he moved a final wage premium to a defined contribution plan).
The behavior of a financial adviser, if your husband had one, is something that he has to include instead of yourself, because you were not the customer.
In any family financial proceedings after a divorce, I would expect a court to wish that your spouse had investigated all possible places of refuge.
Are you allowed to browse your husband's paperwork?
You mention that you apparently carried out a clandestine search for his paperwork.
The fact that he sent these documents to his mother suggests that he was trying to keep these things secret from you.
It can be a nasty surprise for you, but you have no right to access documents that your husband considers private.
If you have made a copy, I recommend that you destroy it. If you have saved originals, they must be returned to him.
What happens to your house?
You say that your home is worth £ 130,000 and that the mortgage has £ 35,000 outstanding.
You are 62 and do not say that you earn money yourself, so I do not expect that you can repay the mortgage through your own source of income.
It seems to me that the house should probably be sold.
How should the assets in the house be shared between you?
There is £ 95,000 equity in the house.
After a long marriage, a court will conventionally split the assets 50/50, so you would each start with a fictional expectation of £ 47,500.
Like I said, his retirement was probably worth much more than your house, let alone & # 39; his share & # 39; from the house.
The question from a court that grants your assets in the home to compensate for inflated pension assets raises two different questions.
1) Investment pension assets for current assets
The first is how you would normally trade the right to pension assets with current capital.
The assessment is not the same way. To gain access to pension assets after the conventional tax-free sum of 25 percent has been recognized, the recipient must pay income tax on his retirement and other income as explained above.
The court will be interested in the net value of the pension after the tax has been reduced.
There is also often a debate about whether it is worth having cash instead of pension assets. However, the events here seem to have overtaken this question.
I do not know what your husband's pension was worth, but if he had worked for forty years, I would make a gamble that his pension was worth more than your house, and possibly with a considerable margin.
STEVE WEBB ANSWER YOUR PENSION QUESTIONS
He will be required to reveal what he had in financial proceedings.
2) What will the court do about its conduct when gambling its pension capital?
In some limited circumstances, the courts are willing to & # 39; coarse and obvious & # 39; to take financial misconduct into account when deciding whether it should deviate from a 50/50 distribution and & # 39; add & # 39; of some or all that & # 39; willfully expelled & # 39; has been found.
The cases where the judge is willing to do this are quite rare and one judge referred to the behavior that a & # 39; panting & # 39; instead of just one & # 39; sip & # 39; factor before it was taken into account.
It is likely that gambling away all pension savings schemes would be seen as a deliberate disappearance with the required avoidance factor. But that is not the end of the matter, I fear.
In assessing the trade-off of behavior, the court will take into account all circumstances of the case, including the needs of both parties.
In a case where the assets are plentiful, there may be enough fat to perform an & # 39; add-back & # 39; exercise and give each party an uneven amount, which is nevertheless sufficient to do them both to relocate.
In this case, however, I am concerned that there is very modest equity and that you are lucky to buy a house for £ 95,000 depending on where you live in the country.
However, retirement homes will be available for you that are less than £ 100,000 depending on where you are willing to live.
It is very unlikely that £ 47,500 would allow you to live in private accommodation.
To make matters worse, the possession of this capital can discourage you from some state benefits if it is not used to buy a house.
There must be a real risk that the court would say that there is simply not enough money to "bring back" a sum of money that has been spent.
The court might make some adjustments from 50/50 to reflect what your husband did, but it is likely that the court will grant him something to continue his life with and to meet his needs.
The exact outcome would be a matter of discretion for a judge dealing with this case.
If I were you, I'd investigate if you could relocate yourself for £ 95,000 or less.
If that is possible, you could be free to suggest that you have all the capital (but this may be considered an optimistic outcome from your point of view) or that any capital due to your husband should be deferred in the payment to him , with you to give him a complaint about your next property for what he might be entitled to in due course.
This would mean that he gets his money for a future trigger event. Traditionally, such triggers are dead or married.
The argument that he is depriving him of capital, whether on an outright or deferred basis, may have legs if it appears that he will probably only gamble this share if he now has capital to him.
Check your state pension position again
You may want to double-check your respective pension savings positions.
You refer to yourself as a housewife, so I don't know if you have a history of work that would have allowed you to build up a full history of the national insurance contribution to justify a full state pension.
If you had children or were an unpaid caregiver, you may be eligible for a state pension benefit during certain periods, even if you have not worked.
Given your age, you are not entitled to a state pension on your spouse's details, as this is only available to those who reached their state pension age before April 6, 2016.
If your husband has made an additional contribution to a second state pension in the past, it may be possible to request a pension distribution order for & # 39; extra & # 39; payments he receives for this.
How this can happen depends on whether he is in the old or new state pension and, while you state your age, you do not disclose his age, what would determine which state pension scheme applies to him, so I cannot continue help in this regard.
What should you do now?
Your first step should be to find a lawyer who can help you resolve the issues I explained above. I am sorry again that there is little comfort for you here.
Note that nothing I said above is formal legal advice and should not be relied upon as such. I cannot accept responsibility for any acts or forbearance taken in the light of this.
The information provided by our expert is illustrative and for the purposes of this article. Nothing in this answer constitutes personal legal advice.
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