Divorce and Crystallised Pension

[WrenChasen]

One of my friends (yes, really) has filed for divorce and as friends do, we've been discussing the possible financial outcome - not least because her husband's first wife (this will be his third divorce) has warned her she'll probably need a forensic accountant to unravel his assets.

They married in 2005, she's not interested in 'taking him to the cleaners', and really just wants to be put back in the position she was when they married, ie., her own mortgage-free house and lump sum to invest for income. She doesn't work and will shortly receive her state pension (he refused to pay the £5000 needed to top it up, so she borrowed the money from her mother).

I know she's dreading the legal wrangling, and one thought that occurred to me is she might be able to ask for half of his private pension which is currently in drawdown, which would more than cover what she needs/would like to enable her to move on. He's currently drawing down £100,000 per annum. It's just a thought, but I can't find answer on the internet and don't want to suggest it if it's not a viable solution.

[DrFfybes]

The thing that stands out there is drawing down £100kpa from (presumably) a SIPP. Either he is well over the LTA, or it isn't going to last long. Also the tax bill is massive, which suggests a LOT more money tucked away elsewhere for when the publicly visible SIPP runs out.

Obviously we don't know the history or ages (wife 3 is aprently mid 60s), but that sort of asset base after 2 divorces suggests some serious money somewhere. Wife no.1 might well be correct.

Paul

[WrenChasen]

The thing that stands out there is drawing down £100kpa from (presumably) a SIPP. Either he is well over the LTA, or it isn't going to last long. Also the tax bill is massive, which suggests a LOT more money tucked away elsewhere for when the publicly visible SIPP runs out.

Obviously we don't know the history or ages (wife 3 is aprently mid 60s), but that sort of asset base after 2 divorces suggests some serious money somewhere. Wife no.1 might well be correct.

Yes, he's not exactly boracic, definitely has serious money - and you make a good point, that £100,000 pa unearned income is very unlikely to come solely from a SIPP. Additionally, he also currently receives a fairly hefty income from a few days' consultancy work, but I would think that'll tail off in time (he's 72). He has quite an impressive CV and among the stated achievements on his LinkedIn page is the acquisition by a large company (frequently discussed on this site) of a 250-employee company which he had started from scratch.

The real problem is his need to control. Initially he didn't want to instruct his own solicitor and emailed his wife's solicitor to set up a meeting to "plan the way forward". Unfortunately, by doing that he appears to have aggravated the solicitor into fight mode, which isn't ideal and definitely not what the wife wants.

The bottom line is my friend really has no interest pursuing half his assets (they married in 2005) and definitely no appetite for a protracted legal battle. She just wants to escape from under his thumb. So far I've offered no suggestions, but based on what she's said, I would have thought a clean break settlement of £1m, while in all likelihood being less than equitable, should be her goal. It would enable her to buy a reasonable three-bedroom detached house similar to the one she had before they married (circa £500k in these parts) and, assuming the markets pick up, provide an income for the rest of her life. I just don't want to say the wrong thing and/or give her false hope. She's asking for my opinion and I can't keep saying it's best sorted out by the lawyers, which I definitely am not.

(As an aside, these people are neighbours; she's always been down-to-earth and friendly but he's managed to make himself unpopular on a few occasions - not least when he tried to get everyone to agree and contribute to having our unadopted road made up. The road is a dead-end, his house is at top and he was obviously fed-up with the dust and negotiating the potholes in his expensive Jaguars, so he posted a letter through everyone's door saying that making up the road to highway standard would add value to our properties. To that end, he'd obtained various quotations, measured our frontages and calculated our individual contributions. The road remains unmade.)

[DrFfybes]

If the split is relatively amicable, there is perhaps no need for solicitors yet.

They could try Mediation - she will have an idea of his worth, and if she is only asking for a fraction of what she might get, this could be a simpler and cheaper route.

Paul

[WrenChasen]

If the split is relatively amicable, there is perhaps no need for solicitors yet.

They could try Mediation - she will have an idea of his worth, and if she is only asking for a fraction of what she might get, this could be a simpler and cheaper route.

Paul

Sadly, not amicable, solicitors are already involved. It's taken a year to reach this point. Mediation isn't an option as he won't entertain it.

He'll be back in the UK this weekend having spent the last month at their property abroad and she's dreading it as she knows he'll start pestering her to tell him what she wants by way of financial settlement. He told her before he left he was going to remortgage the house in the sum of £300k so she can buy a flat because that's all she needs.