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Can wife get a share of a SIPP?

  • autopaints
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05 Mar 08 #15901 by autopaints
Topic started by autopaints
My brother and I run a family business. We set up a SIPP to enable us to be able to buy a unit.
We now are in the process of buying the unit out of the SIPP.
This will leave around £130k in the SIPP
My brother is in the middle of divorce proceedings.
I believe that his wife of 4 years (no children) is entitled to 50% of his share of this pension fund. Is this the case?
Is there any advice on how to get around this?

The woman is a complete gold digger so I am not being heartless here.

  • Peter@BDM
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06 Mar 08 #15936 by Peter@BDM
Reply from Peter@BDM
The short answer is that yes, she is probably entitled to a share of the pension – stating point is 50% of his pension fund.

Placing a value on the pension is the biggest problem with most pensions and SIPPS are probably the most difficult. This is because the nature of the underlying assets makes placing a realistic value on the pension difficult, particularly as in your case when the value of the asset is possibly depressed now (that could work to your advantage).

Another problem with SIPPs and divorce is that pension sharing is unlikely to be an ideal solution. offsetting could be a better option for all parties but there are many issues to consider. I do not think you will find that you can actually get around your brother’s wife getting her share of the pension value, but it does not need to be the SIPP itself. You will have to view this as a damage limitation exercise.

There are some complex financial planning issues to be dealt with here, as well as the legal and divorce ones. I suggest that you or he needs the help of a good financial advisor who is not only very comfortable dealing with SIPPS but whom also has experience of divorce cases.

If the advisor who normally deals with your SIPP does not fit the bill, your brother could ask his lawyer to find a Resolution Accredited Independent Financial Advisor. Resolution does not make their accredited IFA list available to the public on their web site but members (including affiliates like me) can access it. If your brother’s lawyer cannot help, I could possibly give you contact details of some local Resolution Accredited IFAs if you send me a private message with an idea of where you are based.

P.S. I am not an IFA, so please do not think that I am biased in what I have written.

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