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Posts Tagged ‘divorce’

Jim Richards discusses divorce and pension sharing orders in FT Adviser and Today’s Wills & Probate

Posted on: March 25th, 2025 by Natasha Cox

Director and Head of Family Jim Richards discusses how despite their usefulness, the use of pension sharing orders in divorce proceedings has not become widespread since their introduction 25 years ago. 

Jim’s article was published in FT Adviser, 20 March 2025, and can be found here. A version of his article was also published in Today’s Wills & Probate, 21 March 2025, and can be found here.

It is a sadly familiar scenario at the end of a marriage – especially in TV dramas. Along with the sale of the house there is the dividing up of the debris from the failed relationship. Who gets the pictures? Who gets the potted plants? Who gets the cat?

Not so often featured is perhaps the most important decision of all: who gets the pension?

A study undertaken on pensions and divorce at the start of the decade by research hub MICRA, based at the University of Manchester, along with the Pensions Policy Institute, came to some clear conclusions.

The research found that there were “wide gendered pension disparities” within couples at the higher end of the income distribution, as well as those at the lower end too. Overall, it suggested that such disparities could make a “marked difference” to couples going through separation proceedings. 

However, unlike a prenuptial agreement, for example, pension sharing on divorce should not exclusively be a concern for the wealthy.

Its potential importance and contribution to wellbeing applies widely across society as a whole.

Yet, in the midst of the mayhem that often accompanies the dissolution of a marriage, it can easily get overlooked.

Pensions often not priority

By and large couples heading for divorce are in their 30s and 40s.

Retirement may seem a long way off and the immediate priority might be ‘what happens now?’ rather than the remote issue of finances 30 years ahead. 

Of course, one aspect of this is that pensions still do not loom large enough in younger, middle-aged people’s awareness. Many do not save enough and they do not do so when they are young enough for it to make a difference. 

As revealed by the MICRA and PPI research, most people are also significantly under-resourced in terms of their retirement income and pay little attention to this until they are in their 50s. 

By this point, it is obviously much harder to compensate by increasing contributions for the years that have already passed.

Meanwhile, on divorce, this deficit problem can be compounded if parties are aiming to take on new mortgages to meet their housing needs with the possibility that they might not be repaid until well into retirement.

Any income that they enjoy must be deployed first to repaying the mortgage. 

They will not have time enough from perhaps their early 50s until retirement in which to put more money into a pension fund.

Short-term thinking about pensions can overlook the importance of long-term financial security – and it also reflects the importance of receiving tailored legal advice.

If you would like advice on divorce and financial settlements, please contact a member of our Family team.

How athletes and celebrities can ensure they stay on the fairway during divorce proceedings

Posted on: July 18th, 2024 by Natasha Cox

Following Rory McIlroy’s recent divorce filing, and his subsequent dismissal of these proceedings, Head of Family Jim Richards and Associate in the Sports & Entertainment team William Bowyer explore how celebrities and athletes can ensure they stay on the fairway during divorce proceedings. 

Jim and William’s article was published in eprivateclient, 13 June 2024, and can be found here.

Golf superstar Rory McIlroy’s recently announced divorce raises a number of important questions for athletes and celebrities managing divorce proceedings – particularly when filing for divorce overseas. 

While Mr McIlroy and his wife Erica Stoll have since ended divorce proceedings, this widely reported case still bears relevance for those looking to manage high-profile separation proceedings.

High-net-worth individuals such as athletes and other celebrities often have a choice of jurisdictions in which to file for divorce. The forum for proceedings can be pivotal to a case, and thus will often be a key factor in deciding where proceedings are filed. 

In Mr McIlroy’s case, the Northern Ireland-born sportsman had papers served on Erica Stoll, his wife of seven years and a New York state native, at their home in Jupiter, Florida. Court documents were subsequently revealed to have been filed in Palm Beach County, Florida, confirming the jurisdiction selected by Mr McIlroy for the couple’s divorce proceedings.

Deciding on the most appropriate jurisdiction to deal with a divorce case can, however, lead to a number of challenges in dealing with assets across a number of jurisdictions as well as the tax considerations to which high-net-worth individuals must pay heed if they are to stay on the fairway during divorce proceedings.

Failure to consider the various cross-jurisdictional complexities of divorce can give rise to costly and unwanted satellite litigation, and suggests that it is therefore important for athletes and celebrities to seek advice from legal, tax and pension professionals from all relevant jurisdictions to ensure as swift and efficient a resolution as possible. 

However, the procurement of such counsel comes at a not inconsiderable cost, especially in situations where there is a wide range of disputes between the divorcing spouses, leaving both parties exposed to a significant cost burden at the outset of the case and throughout the ensuing proceedings.

Beyond the legal case itself, image and reputation management is also of the utmost importance, particularly for athletes and celebrities, as a messy and public separation could result in lucrative endorsements being lost. In Mr McIlroy’s case, as with so many others living in the glare of the media spotlight, already every available detail of the divorce proceedings is being pored over by the press and public alike in typically scurrilous fashion. 

Mr Mcllroy’s brand partners will need to consider their contractual arrangements with the golfer and assess whether a) this matter impacts their partnership and b) whether they have any grounds under their contract to end the relationship or at the very least, use it to their commercial advantage.

Celebrities who are forced to live their lives in the public eye have to be extra vigilant as to how each and every move they make will be interpreted, no matter how private the matter at stake. The well-documented travails of Mr McIlroy’s fellow golfer Tiger Woods during the collapse of his marriage to Erin Woods in 2009 will have given Mr McIlroy and his advisers ample food for thought when considering how best to handle the optics of his own marital breakdown.

High-net-worth individuals, celebrities and athletes must seek a wide range of advice before filing for divorce – including everything from tax and pensions advice to image rights and IP – to ensure that separation proceedings are handled swiftly and any potential fallout is minimised. Of paramount importance is choosing representatives to sensitively handle child arrangements to minimise the impact of the separation on the couple’s offspring. 

Frequently, children become unwitting victims of warring spouses’ anger towards one another during divorce proceedings, and all too often the glare of publicity spurs parties into even rasher and more regrettable actions than they may otherwise have taken had they not felt compelled to ‘prove’ themselves and their resilience to the world at large.

Similarly, it is imperative for both parties in divorce proceedings to select advisers as carefully as possible. It is, after all, their guidance which will be of critical importance to the outcome of the case, and to the ultimate financial settlement between the divorcing couple. 

Divorce and separation is never easy, nor pleasant, for either side, but when played out in the public eye there is even more potential for mistakes and missteps. Time spent calmly and diligently assessing options at the outset of a case may at times seem onerous and expensive, but if deployed properly will pay dividends in the end.