Get the most money in your divorce! Trudy thought she’d get a chunk of her husband’s £1m pension – then had a rude awakening. Top lawyer VANESSA LLOYD PLATT what you MUST know

You won’t be surprised to hear that as a divorce lawyer one of the questions that I’m often asked is, ‘when is my best time to file for divorce in order to get the highest settlement?’.

The prize they have in mind is their husband (or wife’s) pension and I give them a very simple answer: the longer the marriage – the bigger the claim.

Take Trudy whose second marriage was to Eric, a wealthy property developer who had a few properties, ISAs and investments. To Trudy, the real prize was Eric’s pension which was worth more than £1 million.

The marriage came to an end after five years, but when Trudy tried to claim against Eric’s pension she was devastated to be told by her lawyer that instead of the half-share that she had calculated in her mind that she would be awarded, she was wrong.

Eric could, in fact, ring fence all the pension that he had built up prior to the marriage. This meant that Trudy could only lay claim to a tiny proportion that had accrued during their short time together.

The judge felt that the excessiveness of Trudy’s claim was too high and that the majority of the wealth in the marriage had come from Eric and this was reflected in the settlement that Trudy received.

So while she got a capitalised settlement to reflect the lifestyle that they had enjoyed together, it was nowhere near her expectations. The moral of this story? A short marriage equals less assets awarded.

It couldn’t have been more different for Gloria, who was married to Frank for more than 30 years. Frank admitted to having affairs with women who he referred to as ‘the hired help’, believing it did not really count as infidelity. It did to Gloria. As the pensions stacked up during their three decade relationship, Gloria was able to claim half of it and was granted equality of all the pensions.

Frank could not ring fence one penny of it. And thanks to the length of the marriage, Gloria received what is called a ‘Joint Lives Order’ for maintenance. Put simply, this means Gloria would be given maintenance for life, although this is rare today as most maintenance payments are for a set term only. 

It was not helped by the fact that Frank had not been forthcoming over the true extent of his savings and had at the last moment tried to transfer funds offshore. He was given a punitive award and Gloria benefited from several thousands more on her side of the divorce equation. The moral here is that dishonesty does not pay – especially in a divorce court.

So that’s short and long marriages – what about a longer than average length of marriage (12 years) for say 15 years?

Here the court will equalise the capital of the pension unless wealth has been accrued before or indeed, for a period, after separation.

It is always crucial that a pensions expert analyse the value of a pension so the correct figure can be calculated.

Which is where Gemma came unstuck. She had a 16-year marriage to City broker Paul. His pension ran into hundreds of thousands of pounds. Gemma was none too bothered by the pension but, like many wives I see, she wanted the security of staying in the home that she loved. So instead of claiming any of Paul’s pension she traded it off against the value of the house.

This is called a ‘set-off’, but as a lawyer I would always suggest to any client that an actuary report is obtained first and all options are considered.

Wives in particular can come out with a lesser deal when they choose this option. The moral here is that you may feel young and ready to start afresh, but do not be too quick to trade away your future pension.

Another question I’m often asked is whether a mediator will take into account all of the couple’s assets to maximise a settlement.

So many people seem to believe that mediators will go easy on the parties – and husbands in particular – might get away with more by using a mediator, than if the matter is before the court.

This is a fallacy, as Neil discovered. The company director thought that mediation would mean that he could put pressure on Judy to settle. It had been a long marriage spanning twenty-eight years and he thought that Judy was not the brightest. He felt he could bluff his way through and bamboozle the mediator.

What Neil had not reckoned upon was the tenacity and cleverness of the mediator who insisted that all information be produced for the meetings. The mediator could see that Neil was being obstructive in answering queries about financial transactions and movement of money between subsidiary companies.

Little had Neil suspected that the mediator had been a forensic investigator for HMRC, before becoming a matrimonial mediator. After many sessions the mediator suggested a settlement figure which Neil was outraged by and insisted they go to court. Unfortunately for Neil – the exact same settlement figure was reached in court. It’s worth bearing in mind that mediation can be a much better way of resolving matters but is never a soft option.

Mediators will assist the couple and instruct actuaries to work out pension divisions whatever the length of the marriage. The courts are now encouraging the parties to consider alternatives to court proceedings more than ever. Arbitration is also being encouraged. All these options are available in short, medium and long marriages.

So no matter the length of your marriage, I advise all my clients not to have unrealistic expectations of what the final figure should be. It’s crucial to realise that you cannot punish your soon to be ex-partner in the courtroom. Unless you can demonstrate that the behaviour of your spouse has had a financial impact, the conduct or behaviour will be ignored.

Let me introduce you now to Henry, who thought that he was being particularly clever when he transferred his shares in the family company to his brother, cashed in the capital from his pension and gave it to a friend and bought himself a Lamborghini. 

This was because Claudia, his wife of twelve years had started divorce proceedings. At the end of the litigation, the court found that he was deliberately trying to reduce the assets available to Claudia and added back all the value of the pension, the cost of the Lamborghini and the shares to his side of the equation and then divided all of it in half. Henry’s actions were so contrived that his attempts to drain the assets totally backfired on him. Oh and Henry had to sell the Lamborghini.

The moral of the story when it comes to how to maximise your settlement? Don’t try to be too clever, play fair and honestly, or risk the very opposite of what you hoped to achieve. Divorce can be a minefield, and it does not have to blow up for either of you if you both take sensible steps towards resolving matters.

*All names have been changed to protect client identity.