For many people divorcing later in life, conversations about finances extend beyond the immediate questions of property, pensions and retirement.
For many people divorcing later in life, conversations about finances extend beyond the immediate questions of property, pensions and retirement.
After years of building a life together and creating financial security for their family, many people start thinking about what they would ultimately like to leave behind and how separation could affect those plans.
A question we hear regularly is whether children and grandchildren will still benefit from the assets their parents or grandparents have spent years building, particularly if circumstances change again in the future.
If that's something you're thinking about, there are several important considerations worth keeping in mind.
Expert insight
Jennifer Brunt, Head of Family Law, says:
"Many people assume inheritance planning is something to think about after a divorce has been finalised. In reality, it's often part of understanding what the future could look like and making informed decisions before arrangements are finalised."
"Where property, pensions, investments and family wealth are involved, it's important to understand not just how assets are divided today, but how those decisions could affect children and grandchildren in the future."
1. Review your will
A will is often the first place people look when thinking about inheritance.
If your will was written many years ago, it may no longer reflect your circumstances or intentions. Reviewing it during or after divorce can help ensure it still aligns with your wishes and the people you want to benefit from your estate.
This can be particularly important where there are adult children, grandchildren, family assets or wealth that you have always intended to stay within the family.
2. Don't assume your will covers everything
One of the most common misconceptions is that a will controls every aspect of inheritance planning. In reality, some assets are dealt with separately, pensions are a good example.
Pension benefits don't always pass according to the instructions in your will. Instead, pension providers will usually look at the beneficiary nominations attached to the pension itself. That means you could have an up-to-date will, but outdated pension nominations.
If you've been through a separation or divorce, it's worth taking the time to check that both still reflect your wishes and the people you would like to benefit in the future.
3. Consider whether a trust could help
If protecting assets for children or grandchildren is important to you, a trust may be worth discussing.
Depending on your circumstances, trusts can help:
- Protect assets for future generations
- Preserve family wealth
- Provide greater control over how assets are passed on
- Support longer-term family planning
- Help ensure assets are ultimately distributed in line with your wishes
Trusts won't be right for every family, but they can be particularly useful where inheritance planning is a significant priority or where there are concerns about how assets may be passed on in the future.
4. Consider how remarriage could affect your children's inheritance
For many parents, this is the question that sits behind their inheritance concerns.
When a couple with children divorce later in life, it's often assumed that whatever remains of their assets will eventually pass to their children. However, if one parent remarries in the future, those plans can become more complicated.
For example, if assets pass to a former spouse and they later remarry, update their will or make different arrangements for their estate, the inheritance eventually received by the children may not be the same as originally intended.
While every family's circumstances are different, there are steps that may help reduce this risk. Reviewing your will, updating pension beneficiary nominations and exploring whether trusts or other estate planning arrangements could be appropriate are all worth considering if protecting inheritance for children and grandchildren is important to you.
Seeking advice early can be particularly valuable. The earlier inheritance concerns are discussed, the easier it is to understand what options are available and whether additional protections may be appropriate for your circumstances.
5. Take advice before decisions are finalised
Inheritance planning, pensions, trusts and family wealth are all closely connected.
Where significant assets are involved, decisions made during a divorce can sometimes have implications far beyond the immediate settlement.
Taking advice early can help you understand the options available, identify any arrangements that may need reviewing, and explore whether there are steps that could help support your longer-term goals for your family.
For many people, it's simply about ensuring that the plans they've spent years putting in place continue to reflect what matters most to them.
The first step starts here
At Slater and Gordon, we regularly support people through the financial aspects of later-life divorce, helping them understand how separation could affect the assets they've worked hard to build and the people they hope will benefit from them in the future.
Whether you're thinking about inheritance, trusts, pensions or wider family wealth, we can help you understand the options available and the steps that may help support your plans for future generations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]