Changes implemented in April of this year, as previously reported by Today’s Wills & Probate, have altered the way over 55s can now access their pension funds. For legal professionals, the new rules prompt questions as to how the impact will affect their future work.
Since the pension freedoms have been implemented, there has already been a rise noted in the amount of so-called ‘silver-splitters’ – with some firms citing the increase in later-life marriage splits to be a direct result of the new pension rules. Unhappy couples may have previously had to consider selling the marital home in order to fund a divorce. However a seemingly more enticing alternative is now achievable through the introduction of these new freedoms.
James Muir-Little, Head of Family Law at Furley Page, has been quick to note the importance of how access to money from pension plans has allowed for a greater ease in re-homing both partners in a divorce situation – a situation which can often be difficult because of financial restrictions.
However, Muir-Little also warns of the greater tax repercussions in these instances, another consideration legal professionals face with clients cashing in their pensions.
A further impact for practitioners to consider is how these changes may affect their clients’ wills. With the rise in older-age divorce and marriage splits, greater emphasis is needed for those who are currently without a will or who may need it updating.
Emma Myers, the Head of Wills, Probate and Lifetime Planning for Saga Legal Services, has warned of the dangers of not creating a will, indicating how the strict rules of intestacy often do not reflect the a person’s wishes.
There is also the issue facing new divorcees who may not have included a new partner in their will. The implication of this is that under the rules of intestacy, a valued loved one may not receive assets intended for them.
This suggests that the professionals handling each case, both the fields of divorce, and wills and probate, will see continued expansion as a result of the pension reforms earlier this year.
Taking legal and financial advice cannot be too readily encouraged in light of the new pension changes, with the Government recommending the public to liaise with a qualified practitioner before jumping to any quick decisions.
Have you witnessed a surge in the number of divorces amongst your older clients, following the introduction of pension freedoms? Would you consider the freedoms to directly affect divorce levels, or are there other aspects to consider?
Please share your thoughts in the comment section below.
