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New law for ‘no fault’ divorce, but financial planners urge caution

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09/04/2019
The government has announced new legislation to allow for a ‘no fault’ divorce.

This is the first change in the divorce system for more than 40 years and will remove the need for either side to show ‘fault’, ending the right of one party to contest an application for divorce from the other.

The new law will apply to marriages and civil partnerships, but will impose a minimum six-month reflection period before the petition for divorce and it becoming final.

The Ministry of Justice said the new legislation would be tabled “as soon as parliamentary time allows”.

Justice Secretary David Gauke said: “Hostility and conflict between parents leave their mark on children and can damage their life chances. While we will always uphold the institution of marriage, it cannot be right that our outdated law creates or increases conflict between divorcing couples. So I have listened to calls for reform and firmly believe now is the right time to end this unnecessary blame game for good.”

Financial planning

Commenting on the news, Heather Owen, financial planner at Quilter Private Client Advisers, said: “Today the government is taking steps to bring archaic divorce legislation up to speed with modern life, with a new ‘no fault divorce’. Divorce law hasn’t changed since 1973 and it’s outdated nature is hard to miss. Currently divorces are only granted after it can be proved that the marriage has broken down because of adultery, desertion or “unreasonable behaviour”, or because both spouses agree to the divorce and have lived separately for more than two years.

“The new legislation aims to overhaul divorce law and reduce family conflict. But no matter how good natured your divorce is or how simple it seems, the separation of jointly owned assets can be costly and complex and requires a rethink on estate planning, inheritance and tax planning.” She said divorcing couples should review their wills, life insurance and pension benefits.

Pension rules

Kay Ingram, director of public policy at LEBC, a financial advice firm, said pensions can be particularly problematic and divorcing couples shouldn’t neglect this as divorce gets quicker. Some pension schemes, which pay a guaranteed income for life, do not pay a dependant’s pension to an ex- spouse after the scheme member dies

She added: “It is essential that couples agree upon the splitting of pensions with the court, known as a consent order, and that the pension sharing order is implemented before applying for the decree nisi.

“If the pension scheme member dies after the decree absolute, some pension schemes will pay out nothing, as their rules only require a lifetime pension to be paid to the widow/er or civil partner of the deceased member. Failing to implement a pension share before the decree absolute, which follows automatically six weeks after the decree nisi, could result in huge financial loss.”

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