Entitled to MY HUSBAND'S PRIVATE INVESTMENT PENSION

[steampowered]

I agree with goodatresearch. Your entitlement to a share of his assets is only triggered on divorce. If he deliberately reduced his pension funds before a divorce (and I'm not sure why he would do that), that would be examined and taken into account by the court and you would presumably end up with a larger slice of the pie.

[goodatresearch]

I agree with goodatresearch. Your entitlement to a share of his assets is only triggered on divorce. If he deliberately reduced his pension funds before a divorce (and I'm not sure why he would do that), that would be examined and taken into account by the court and you would presumably end up with a larger slice of the pie.

 

Plus part of disclosure includes hand over all accounts, if he's providing full disclosure, moved or sold assets wouldn't be difficult to identify.

[Mrsshe]

You are not sure why he would do that? Well, neither am I - I just guess!

 

Unfortunately, I have been a fool all the way. I did not see any problems with letting him have our assets under his own name or company name. I was told that it had been commercially more viable to let assets be within his company. Nothing illegal! they were commercial loans with better terms as opposed to personal loans.

 

I found out too late after he had cancelled his normal pension fund to set up this new pension pot scheme within his company.

I do not agree with the law to allow this to happen - cancel the pension scheme where by spouse is entitled to share of pension at all times, and transfer it to a company scheme which excludes the spouse all together! there is something wrong here.

 

On my objections, I was told that scheme can not be cancelled or modified to include me (I am not a director of his company, and this scheme is dedicated to those). I am also told that tight controls are made over operation of scheme by government appointed executer of the pension pot!! whatever that means! what good would it do to the spouse?

 

Furthermore, I hear that as from next year, directors of company will be able to draw even more cash out of the pot tax free. This is in addition to current annual 5% tax free withdrawals. Again, I think this is not right. Spouse should be sharing the pension fund, where ever it may be, on equal terms.

This company pot scheme practically disowns the spouse.

 

The time of retiring is flexible and up to the director.

The amount left in the pot thus could have been reduced drastically for the sole benefit of decision making spouse by the time "he" decides to retire.

 

I am told that is the time, I could have a share of remaining pension. Who makes the decision then?

 

I am told that I can not make a claim on the pot in case of divorce as according to new rules, this pot can not be broken into until he retires - right or wrong??

 

I am afraid this is all legal and I can not imagine a court giving a fair verdict to me.

I BELIEVE THE WHOLE SCHEME IS A [problem], AND I WONDER WHY THERE HAVE NOT BEEN OBJECTIONS. HAS ANYONE CHALLENGED IT?

So our pension could be squandered through legal transactions and cash withdrawal!!

 

How can the court accuse him of dishonesty when there are no proof to bad intensions. He could demonstrate that due to market volatilities he has to act in certain way. He could say he sold shares because it financially made sense. All these explanations seem to be perfectly logical and approved by the so called official independent executor (trustee). Don't you think so?

[honeybee13]

Hello there.

 

I thought that in the event of divorce, a spouse was entitled to part of the pension pot.

 

It's none of my business really, but if you want to divorce him, why don't you just go ahead? The pension pot would have a value on the day you filed proceedings and as pensions are regulated, I imagine there would be a paper trail if your OH decided to do something with the money.

 

You're sitting there fretting about something that might not even happen.

 

Have you spoken to TPAS, the pensions advisory service? They are very good at explaining pensions.

 

HB

[goodatresearch]

This is true. It used to be called ancillary relief but is now called a financial order.

 

The court looks at all assets/capital of both parties, this includes businesses and pensions. Pensions can be split, shared or earmarked. AND yes there would be a paper trail. Also they would look at her husbands future earnings and sometimes maintenance would be ordered. She really needs to just get on with it and stop assuming the law won't protect her and she will be ripped off, because it simply isn't true.

 

 

QUOTE=honeybee13;4594057]Hello there.

 

I thought that in the event of divorce, a spouse was entitled to part of the pension pot.

 

It's none of my business really, but if you want to divorce him, why don't you just go ahead? The pension pot would have a value on the day you filed proceedings and as pensions are regulated, I imagine there would be a paper trail if your OH decided to do something with the money.

 

You're sitting there fretting about something that might not even happen.

 

Have you spoken to TPAS, the pensions advisory service? They are very good at explaining pensions.

 

HB

[steampowered]

The idea behind the divorce process is that it does not matter whose name the assets are in. The court has a broad, general power to reallocate each spouse's assets. It doesn't really matter whether an asset is in the name of one spouse or both houses. The same analysis applies whether we are talking about a house, a car or a pension. Similarly, a spouse cannot exclude the spouse from claiming a share of his/her property by putting that property in sole names or a company name.

 

As things stand under a matter of the pension scheme rules, perhaps you are correct to think that you would not automatically be entitled to anything at all. However, the pension pot will still be considered an 'asset' belonging to your husband and would therefore be taken into account if a court needed to consider how your husband's assets should be allocated on divorce.

 

It is important that you understand the difference between legal entitlement to the pension outside the context of a divorce, and the general reallocation of assets which takes place as part of the divorce process.

 

The same analysis applies if we are talking about a company. The law is very clear that an asset owned by a company owned by a spouse, will be considered part of that spouse's assets for the purposes of divorce nproceedings.

[goodatresearch]

You can put it another way if its easier to understand.

 

Say one partner has a credit card debt of for example £2000. The court cannot change the CC contract to make the other partner the CC account holder and thus liable, but what they can do is take this debt in to account when allocating funds to both parties. For example, it may be decided that the matrimonial "pot" shouldn't be split 50/50, but the party with the CC should receive extra to cover the debt.

[Mrsshe]

Wow, I think I am getting the hang of it.

 

Thank you so much you lovely people, I am getting good advice here..

[Mrsshe]

I am afraid things don't seem to go according to those theories.

 

This pension scheme is not to the benefit of the wife. It can have good amount of asset today, and large negative value the next. What I see now is that it can and does happen.

 

The independent Executer of scheme approves of the change as for "good business practice". Nobody; not even the court, can prove that it was done for any other reason!

 

Within this scheme partners of the company and the pension scheme can increase borrowing over assets, and of course the independent executor of the scheme can not stop such legitimate practices within reason.

 

The value of the scheme CAN reduce drastically, the partners and beneficiaries can be changed any time and new ones appointed with no strings attached to distribution of assets among existing or new partners of the company.

An existing partner who currently has a good percentage of the scheme can also draw out his entire entitlement from date of eligibility of his pension onwards thus leaving as small a value in the pot as possible for the other partner and his current or divorcing wife.

 

Furthermore, the scheme also covers terms of the will! Surprise surprise.

Within the scheme it is allowed to make statements as to how assets should be allocated to the wife, and the independent executor can approve it or change it if he decides so (of course, as it says "within reason".

Therefore, if husband decides to continue with his scheme after retirement age, he CAN do so. The court could then decide to let the husband continue or differ his pension date. The wife would loose out again as she would have to wait for husband's decision re. continued pension scheme. It is entirely up to the husband as to when to start claiming pension. The wife's pension benefit is entirely dependent on his!

So the value of the pot can be reduced at will and in many ways

 

My worries were legitimate.

I need to get more advice regarding this new government scheme because the husband is allowed to annul the contracted out pension within which the wife was the beneficiary.

He can then set up this new scheme and disown the wife during his life time as well as after his death. It is entirely up to the husband to allocate the assets and pension benefits as he wishes. If the court decides to allow the husband to continue with the scheme, then the wife has to wait if the husband can not compensate her in other ways.

This is significant particularly if current value of the pot has become insignificant for the wife to agree to a share of at the time of divorce.

The wife would have to wait and hope that husband will be good enough to increase assets in the pot whilst delaying his retirement date.

If I establish this fact further, I would be making a lot of noise about it. It is not the husband but the government who has agreed to this new scheme - TO ALLOW THE HUSBAND TO EFFECTIVELY DISOWN THE WIFE divorced or not!!

[goodatresearch]

What new scheme are you referring to?

 

The welfare reform and pension act 1999, for instance, gives the court pension splitting powers i.e. you don't have to wait until the former spouse retires, the pension is split using today's value of the pension effectively creating 2 pensions. The pension provider had no say in the matter.

 

Plus, if the court doesn't ear mark or split the pension, they look at the family assets as a whole. Therefore the person without a pension would receive more of the other assets I.e.more than 50% of everything else. Look, I've seen this happen in practice, it is not a theory.

 

For example, one party had no pension but has a house with rental income; the other party had a pension and shared ownership of the marital home. The judge looked at the assets as a whole and the assets were split 50/50. In this case, when the matrimonial house is sold the party with the pension receives a slightly higher amount of the proceeds as the rental home is is of higher value than the pension. Ownership of the pension and rental property stay the same.

 

Your over thinking it and worrying for for nothing.

 

 

 

 

I am afraid things don't seem to go according to those theories.

 

This pension scheme is not to the benefit of the wife. It can have good amount of asset today, and large negative value the next. What I see now is that it can and does happen.

 

The independent Executer of scheme approves of the change as for "good business practice". Nobody; not even the court, can prove that it was done for any other reason!

 

Within this scheme partners of the company and the pension scheme can increase borrowing over assets, and of course the independent executor of the scheme can not stop such legitimate practices within reason.

 

The value of the scheme CAN reduce drastically, the partners and beneficiaries can be changed any time and new ones appointed with no strings attached to distribution of assets among existing or new partners of the company.

An existing partner who currently has a good percentage of the scheme can also draw out his entire entitlement from date of eligibility of his pension onwards thus leaving as small a value in the pot as possible for the other partner and his current or divorcing wife.

 

Furthermore, the scheme also covers terms of the will! Surprise surprise.

Within the scheme it is allowed to make statements as to how assets should be allocated to the wife, and the independent executor can approve it or change it if he decides so (of course, as it says "within reason".

Therefore, if husband decides to continue with his scheme after retirement age, he CAN do so. The court could then decide to let the husband continue or differ his pension date. The wife would loose out again as she would have to wait for husband's decision re. continued pension scheme. It is entirely up to the husband as to when to start claiming pension. The wife's pension benefit is entirely dependent on his!

So the value of the pot can be reduced at will and in many ways

 

My worries were legitimate.

I need to get more advice regarding this new government scheme because the husband is allowed to annul the contracted out pension within which the wife was the beneficiary.

He can then set up this new scheme and disown the wife during his life time as well as after his death. It is entirely up to the husband to allocate the assets and pension benefits as he wishes. If the court decides to allow the husband to continue with the scheme, then the wife has to wait if the husband can not compensate her in other ways.

This is significant particularly if current value of the pot has become insignificant for the wife to agree to a share of at the time of divorce.

The wife would have to wait and hope that husband will be good enough to increase assets in the pot whilst delaying his retirement date.

If I establish this fact further, I would be making a lot of noise about it. It is not the husband but the government who has agreed to this new scheme - TO ALLOW THE HUSBAND TO EFFECTIVELY DISOWN THE WIFE divorced or not!!

[honeybee13]

Hello again.

 

I'm sorry, I haven't re-read the thread. What type of pension scheme are we talking about please? Is it something like a SSAS?

 

HB

[steampowered]

Evertyhing you mention should be taken into account as part of the divorce process including assets to which the husband is entitled under a trust (which appears to be what you are talking about).

 

If your husband has access to income through the pension he can be ordered to pay a maintenance order to you on that basis. Your husband wouldn't be able to stop the maintenance order by delaying the payout date on his pension.

 

I don't really understand what you are saying about the level of assets in the pot going down to nothing and then coming back up again.

[Mrsshe]

Hi Steampowered. Thanks for your comments. I have looked into details of this kind of company scheme, and now can express my views with knowledge.

Indeed SSAS is a perfectly legal scheme that apparently has been around for some years.

Trustees with permission of a government approved excecuter can bring in their commercial investments into the company pension fund.

These investments can be commercial properties, limited annual cash amounts etc.

I agree that husband will be ordered to pay a portion of his pension income when he retires, however what if he has reduced income from this particular source by the time he retires? I could be given a minimal amount, wouldn't I?

 

Apart from being able to withdraw set percentage of tax free lump sums annually, they can also sell those properties and their next investment might turn up to be a money loosing project therefore reduce the value of the Fund.

 

This way clearly they can reduce value of their fund throuhout a long period.

They also sign a document called "expression of wish". Their expressed wishes will override their will or any other inheritance rules. The persons they wish to inherit their pot do not have to be the spouse, can be anyone. It mainly depends on the executer of scheme who has the decretion to apportion the pot accordingly, however he reserves the right to effect or adjust it as he/she decides as fair - the caveat is certainly there.

 

In the event of divorce, it can indeed become complicated as reduction of value of investment can commercially be justified to the court, equally the amount of annual tax free withdrawals. I can not imagine a fair assessment particularly if company has had the scheme for a long period, it would become costly and almost impossible to examine every commercial decision taken for the period, don't you think so?

 

Purchase and selling of stock shares can also be included in the pot thus decisions to play around with them.

 

The Fund can lend the company as well, which again, can make it more complex as value has been reduced for justified benefit of company. If on certain circumstances the loan can not be recovered, then the Fund value has been reduced.

 

To summerise, the scheme is volunerable to circumstances. It can be sufficient enough for company directors to secure their personal savings and some kind of pension but it certainly reduces the need to set up savings and pension for family. It is based on assumption of total trust between man and wife!!!

 

My comment is that, whilst it is all perfectly legal, it is to the detriment of the spouse during marriage, divorce or after death. This scheme has replaced a supposedly normal man and wife pension plans that I am familiar with as it seems more beneficial particularly to business people. I beleive it takes money and legal rights away from a wife whether married or divorced. I, as the wife, can be left with minimal life savings, pension or inheritance because I relied on my husband to maintain our family savings and pension.

[Mrsshe]

I have to reply myself here. I thank "goodatresearch" because his/her advice does make more practical sense.

Indeed practically two pensions can be created. However I can confidentally repeat what I have been saying all along which is that the value of Fund can be reduced by spouse before it is apportioned to the other.

I think I should at this point stop making further comments as I now have seen what happens. I was not dreaming. I was right. Assets under my name were taken into account. The pension Fund value was drastically reduced by the time the so called "papers trail" was looked at. So who was the looser? Thank you for all your comments.

[goodatresearch]

I'm glad I could help, even if only to explain what happens. The best of luck to you and I hope you haven't been left seriously out of pocket.

 

 

 

I have to reply myself here. I thank "goodatresearch" because his/her advice does make more practical sense.

Indeed practically two pensions can be created. However I can confidentally repeat what I have been saying all along which is that the value of Fund can be reduced by spouse before it is apportioned to the other.

I think I should at this point stop making further comments as I now have seen what happens. I was not dreaming. I was right. Assets under my name were taken into account. The pension Fund value was drastically reduced by the time the so called "papers trail" was looked at. So who was the looser? Thank you for all your comments.

[steampowered]

Divorce courts will look behind the 'names' in which assets are held. Holding assets through a trust does not take the assets outside the scope of the divorce courts. I assume the trust you are talking about is offshore, because letters of wishes are not enforceable in relation to UK-domiciled trusts, but even then it can still be within the jurisdiction of the divorce courts. The court will take into account both assets the spouse owns now and financial resources he/she is likely to have in future.

 

The other point you make is regards to making a fair assessment. It is very normal for an incredibly detailed examination to be made as to what exactly has happened during the course of litigation. As part of litigation it is usually necessary to hand over all documents relevant to a case, whether or not they support the case of the party providing them. Disclosure is enforced by the penalty of contempt of court, for which the potential sanctions go right up to imprisonment. If the fund value has been reduced due to the movement of assets out of the funds, then you ask for the relevant financial statements, and you back that up by either asking the court to draw negative inferences if they are not provided or by going down the contempt of court route.

 

A good example of this is the recent divorce case summarised here https://en.wikipedia.org/wiki/Prest_v_Petrodel_Resources_Ltd, full judgment here https://www.supremecourt.uk/decided-cases/docs/UKSC_2013_0004_Judgment.pdf. As you can see the husband moved several properties through a number of different offshore companies and tried to say that was outside the scope of divorce. As you can see the husband and the relevant companies refused to co-operate and refused to provide information. The solution was simple - the court simply drew negative inferences and decided against him (the court could have also committed him to prison).

 

Obviously these sorts of issues do make life difficult for spouses and they do mean expensive lawyers. I'm not going to pretend it is easy, but these sort of arrangements can certainly be challenged in court.

[citizenB]

Zinia, I am going to start a new thread for you. I will post a link back here and also send you one via private messaging.

[citizenB]

http://www.consumeractiongroup.co.uk/forum/showthread.php?454781-Re-Husband-sends-letter-Intention-to-Divorce

 

Link for Zinia21

[Mrsshe]

I would like to make an additional comment which relates to retiring couples as apposed to divorced.

 

Indeed, the SSAS (company pension scheme) is to my experience totally detremental to rights of the wife in a long marriage. If the wife relies on not so honest husband to maintain her rights and benefits with their pension, the scheme allows the husband total freedom to do whatever he wishes with their retirement savings.

 

In these situations, usually husband justifies changing of their normal family pension scheme by deceiving the wife as "financially more beneficial as well as great saving in tax liabilities of the company" - "trust me, we have been advised by experts"!!

The wife might find out about it at some point during the marriage (tends to be near or during retirement) or even after death of the husband. By that time it may well be too late in her life to remedy.

 

She might even discover of the disater after the death of husband. She will find out that she was left with no or little money in his so called company pension.

 

Furthermore she may find out that her husband has assigned all the assets in this pot to a third person. Legally his wishes, as I have seen the terms and conditions of the scheme) will override his official Will.

I wonder what percentage of wives in this situation do have the stamina or finance to take it to court and challenge the scheme, would they have a chance? I hope someone here with legal expertise could comment on.

 

I wished many women who find themselves in this situation would make comments Here to shed some light if anyone has found a way out of the injustice - this point has nothing to do with divorce. I hope to see more comments for the good of all.