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The moolah link in remarriage

One divorce is bad, two could mean financial ruin, warn Neasa MacErlean and Jill.
None | By HT Correspondent
UPDATED ON AUG 07, 2013 11:51 AM IST

Remarrying is particularly perilous if you have made a bit of money and your new spouse is less well off than you. Why? Divorce rates are especially high for couples the second time around (over 60 per cent, according to estimates from the UK’s Office for National Statistics — far higher than the 41 per cent rate for marriages in general).

And, under case law being consolidated at the moment, courts are more likely to split the couple’s assets 50-50, even if they have only been married for a few years.

Sir Paul McCartney would probably have had a less acrimonious split with Heather Mills if they had got divorced before the House of Lords produced its startling new judgments last May promoting the financial rights of the less wealthy spouse.

This time of year sees a peak in divorce applications, triggered, perhaps, by unhappy couples spending another difficult Christmas together and deciding that enough is enough.

The very wealthy — who tend to have their own financial and legal advisers — may be aware of the implications of the Miller and McFarlane divorce cases last May, but many people who would never regard themselves as wealthy may be shocked to discover that their ex is claiming half their assets after a fairly short marriage that went sour.

The average age at which people marry for the first time is rising (36 and 34 for men and women respectively). So one obvious consequence is that the average age at which people divorce is also rising (43 for men and 41 for women).

By the time they reach this age, many people have accumulated some serious assets — a house and a pension fund, for a start.

If they have to give some of these assets to a former spouse, they may still have just enough time (20 years or so) to rebuild their wealth for a comfortable retirement.

But if they go on to remarry and then divorce again, they can find themselves in the miserable situation of having worked hard all their lives and only having a studio flat and a tiny pension to show for it.

In 2005, the latest year for which figures are available, about 30,000 men who got divorced one in five of the total — were splitting up for a second time.

Other statistics reveal a growing divorce rate among older people — one in eight divorces occurs when the man is in his 50s.

Some tips: Keep your property separate. The courts can redistribute property on divorce, but you have a better chance of retaining property you brought into your marriage if it is kept separate from joint assets. Set aside a portion of money for children from your first marriage in your sole name from the outset.

If you can’t keep your assets separate, make a record of your pre-marital assets, including any equity you had in property, any savings or investments in your sole name, the size of your pension funds and what you were earning at the time of your marriage. Set out all your financial information on the same sheet, signed by each of you.

If you have been receiving maintenance, this will stop when you remarry.

Remember that as soon as you marry, any will you have written will become null and void. Ensure that any children from your first marriage get what you intend by writing a new will as soon as possible.

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