FAQs

Offsetting involves a trade off, using other capital assets to offset the value of the pension. For example "I will take more of the proceeds of sale of the house and/or savings, but will not claim any of your pension".

Disadvantage: there may not be enough capital around to make both of you self-sufficient after retirement - it may still be necessary to pay maintenance anyway.

Earmarking allows an order to be made now against the pension income or lump sum which arises to one party on retirement. For example " I will get an order now against your pension which the pension trustees will carry out, giving me an income by way of maintenance and part (or all) the lump sum that you get when you retire".

Disadvantage: the maintenance comes to an end if the person receiving it remarries; although the lump sum does not lapse (unless that is expressly agreed). It is difficult to administer, especially if it is a long time until retirement. There are still uncertainties.

Earmarking is not available in cases where the divorce petition was filed before July 1996.

Pension Sharing - if a petition for divorce has been filed after the 1st December 2000, it is possible to divide pensions between spouses on divorce. This solution can help to make a clean break possible where previously long-term maintenance would have been contemplated.

This will depend on the length of the marriage and whether or not there are children. If the marriage is short and there are no children, no maintenance may be payable. There would often be a clean break after a readjustment of capital assets in these circumstance.

The court will order Spousal Maintenance to be paid by one party to the other if it feels that such periodical payments are necessary to achieve a fair settlement.

Once a spousal maintenance figure has been agreed then it is sometimes possible to also agree to capitalise the spousal maintenance.

This means working out what lump sum figure you should receive instead of the normal periodic payments. The court will consider the size of the monthly payment and the expected period of time that it would be paid for - and come up with a lump sum equivalent.

Of course this is only possible in cases where there are enough assets in the pot for a lump sum payment to be made.

Capitalised Spousal Maintenance would normally imply that there is a clean break.

This is an area which often creates misunderstandings. The fact is that, usually, if an inheritance has been received before the divorce, then it forms part of what is in the pot and available for division.

It will be a resource; when it comes to dividing who gets what, it will be relevant.

Of course, it is important to acknowledge that the money or property came from one family rather than the other.

When considering the capital resources of the family, the central issue is usually the family home.

After resolving the short-term maintenance arrangements, it will often be the first issue that has to be dealt with.

What happens to the home is likely to be a central part of any financial settlement.

Maintenance orders, Lump sum orders, Transfers of property and Pension Sharing Orders
This article contains a fuller description each of these.

When a marriage has broken down the court has the power to make any orders about finances or property which seem to the court to be just, including maintenance orders. The court will look at every bit of property or capital owned by the husband or wife.

Each spouse must complete a document which gives a comprehensive account of his or her financial position. The court then looks at the facts of the particular marriage to help it decide what orders it can make which will be fair to everyone. When it does so, it has to keep in mind that if there are any children of the marriage, the interests of those children will be the most important consideration. This often means that the parent with children living with him or her will be more likely to keep the home, at least until the children have all finished their full-time education.