THE much-publicised financial award to Heather Mills in the divorce courts last month could be leading women contemplating leaving wedlock right up the garden path.
It is a common misconception that the wives, especially where children are involved, hit the jackpot from divorce settlements and generally receive the marital home as part of the process. And high-profile divorces, such as Sir Paul McCartney's,
which dominate the media, are not helping to dispel this modern myth. With the cost of weddings averaging between £14,000 and £16,000, perhaps a little extra spending on a pre-nuptial agreement and protecting your assets for both parties may be money well spent. But why would you need a pre-nup?
• You may be wealthy and wish to protect your assets.
• You may have pre-owned assets acquired before the marriage. For example, a second property, or perhaps your parents helped you on to the property ladder.
• It could be that you would like to ring-fence inherited wealth or even potential family inheritance.
Whatever the reason, the pre-nuptial agreement could be a sensible step before entering into marriage.
With one in three couples getting divorced in today's society, every woman knows the importance of being financially secure if her happy marriage turns sour and divorce is on the cards. The following issues should be considered for those planning on going solo.
• Home sweet home
The prospect of losing the much-loved home can place a huge financial burden on divorced women. A key point to consider is that property is seldom owned outright, and often comes with a hefty mortgage in tow. Even though lenders are slowly recognising this and are generally becoming more understanding, there are very few options available in these situations, other than selling up and splitting the money.
• Do your sums
We would always stress that making individual financial provision should not stop just because you are in a relationship. Being in a relationship means thinking about things as a couple, but you still need to make sure you are aware of your personal finances and those affecting your children's future.
• Think of future finances
It is good financial planning for women to make their own pension provision so that in the event of divorce, each partner has their own pension arrangements and wives are not left with the family home and kids, yet with no money in retirement. It should be noted that in divorce, your pension will generally be treated as an asset and is used to offset against other assets during the divorce proceedings. Your ex-husband might even be awarded a share of your pension as part of the settlement if you have been granted the family home dependant on the asset value. The law in Scotland differs from that in England. Because the law in Scotland differs, legal advisors will want to know your future plans.
• Keith Mackie is a financial planner with Acumen Financial Planning.
