After his first marriage, my husband’s first wife demanded 50 per cent of his private pension during the divorce settlement.
Now she is dead. She died of cancer and was not able to get half of my husband’s private pension. His son has demanded his mother’s share though there was no will left.
My question is does the son have a right to claim 50 per cent of my husband’s private pension?
Pension worry: My husband’s late ex-wife demanded half his pension before she died so where do we stand now? (Stock image)
This is Money replies: This is both a legal and a pension issue, and experts in these fields address your question below.
Lawyer Katie Spooner looks at your legal situation, while This is Money columnist Steve Webb explains what happens to pensions in a divorce.
Katie Spooner, partner in the family team at Winckworth Sherwood, replies: Your husband’s son does not have a right to claim 50 per cent of your husband’s private pension.
What will be important to establish, however, is whether 50 per cent of your husband’s private pension has already passed to his first wife’s estate – meaning whether it forms part of her assets, legal rights, or interests and entitlement to assets or property that she has left behind following her death.
At the point your husband and his first wife separated, they would have each been entitled to claim over the other’s capital, including pensions.
They would have established what assets they had between them (the matrimonial pot) and how these were to be divided. The division of assets would have been dependent on their particular circumstances, but the starting point following a marriage remains 50:50.
Ask an Expert: Lawyer Katie Spooner and This is Money columnist Steve Webb tackle question involving divorce, pensions and inheritance
If it was agreed between your husband and his first wife, or indeed ordered by the court, that she was to have 50 per cent of your husband’s pension, this would have been confirmed in a Consent Order or Order of the Court.
If your husband has a copy of this order this should confirm his ex-wife’s entitlement.
Once the court order was made, and if a pension share was ordered, this would then have to be implemented by your husband and his first wife instructing your husband’s pension provider to transfer half his pension into a separate policy for his ex-wife.
If the court order was not implemented, then your husband’s son would be able to issue enforcement proceedings on behalf of his mother – assuming he is an executor of her estate, but if not whoever is the executor could to do this – to enforce the Consent Order or Order of the Court.
What happens when someone dies without a will?
The Government explains the rules here.
The general rule is that a course of action, such as enforcing an order that exists at the date of an individual’s death, will survive for the benefit of the deceased’s estate.
This means that if the order that finalised financial matters between your husband and his first wife was still to be implemented at the time of his first wife’s death, her estate could make a claim on her behalf.
If there is no court order in existence setting out his ex-wife’s 50 per cent entitlement to your husband’s private pension, then there does not appear to be an existing claim.
Simply because his ex-wife has died without such a settlement does not automatically give their son a right to seek such an entitlement for his deceased mother.
However, in these circumstances, your husband may want to check his pension policy and the pension rules, and seek specialist advice as to whether his ex-wife still has any entitlement under the policy.
If his son is under 18 and was still financially dependent on his mother, this would still not give him a right to your husband’s pension but rather he would have a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for provisions out of his mother’s estate if she had not left adequately for him in a will.
In addition, your husband would need to consider his obligations to his son, and in this regard, his son could apply to the Child Maintenance Service for child support if it is not being paid, and apply under Schedule 1 of the Children Act 1989 for financial support over and above this.
In these circumstances, and depending on your husband’s relationship with his son, I would strongly recommend he seeks independent legal advice regarding his son’s ongoing care and financial support.
The steps I would therefore take at this stage are:
1) Check the existence and wording of any court order finalising financial matters between your husband and his first wife to see whether she was awarded any of his pension;
2) Check whether any such order was ever implemented, or whether it remains outstanding;
3) Check the wording of your husband’s private pension policy and the pension rules in respect of his ex-wife’s entitlement to any share; and
4) Take expert legal and pension advice on the documents listed above.
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
Steve Webb, This is Money pensions columnist and policy director at Royal London, replies: What happens to an ex-wife’s pension if she dies will depend on the original agreement when the couple divorced, as there are several different ways in which pension rights can be valued and shared on divorce.
I will run through the three main ways that people carve up pensions after a divorce because each one produces a different outcome if someone then dies.
In some divorces, what happens is that the lawyers will look at all of the couple’s assets – the value of the family home, the value of pensions and so on, and will try to agree on a fair share.
Rather than cut everything straight down the middle so that each partner ends up owning half a house, half a pension pot and so on, a deal will sometimes be done so that one party gets more of one asset and the other gets more of another asset.
In such a case it would not matter financially whether either party subsequently died because everything would have been sorted out once and for all at divorce.
If one party died then they could simply leave their housing wealth, pension pot and so on to anyone they wished. This is called offsetting.
A second possibility is known as ‘pension sharing’ and is increasingly common. The way this works is that as part of the divorce settlement it is agreed that your husband’s final salary pension will be shared.
An amount (known as a ‘pension debit’) is taken off the pension he will get and the same amount (known as a ‘pension credit’) is available to the ex-wife.
One thing which follows from all of this is that whether your ex-husband’s first wife is alive or not has no impact on the amount of pension he gets.
The pension debit will apply to his pension when he draws it because this has funded the ‘pension credit’ transferred to his ex-wife.
The ex-wife’s pension pot generates potential payments to her heirs but that is a matter for the trustees of the scheme, who will look at things like a ‘nomination of wishes’ form which she may have filled in indicating who she would like to receive any benefit from the scheme after her death.
A final option, which was frequently selected in the 1990s but is less common these days is known as a ‘Pensions attachment order’ (or in Scotland as an earmarking order).
This is explained more fully on the website of the Pensions Advisory Service here.
The basic idea is that at the point when the scheme member’s pension comes into payment, a proportion of it is ‘earmarked’ to be paid to the ex-spouse.
These arrangements are not popular because they do not amount to a ‘clean break’ between the divorcing parties. For example, the ex-wife would have to wait until the husband drew his pension before she started to get anything, and if the husband himself were to die before reaching pension age then the ex-wife would not get paid.
From your question, it is unclear whether your husband’s ex-wife didn’t get half his pension because she died straight after the settlement, or failed in her claim, or nothing was settled before her death.
But if your husband’s pension was subject to an earmarking order then I would expect that this would lapse on the death of his ex-wife and he would then get his pension paid in full thereafter.
However, you should check the specific wording of the order in the divorce papers and take legal advice on this point before making any decisions on the basis of my explanation of how the rules would normally apply.
TOP SIPPS FOR DIY PENSION INVESTORS