A Legacy Intact: safeguarding your family business in the event of divorce - Book - Page 96
It is therefore important that any
can prove useful in the matrimonial
such arrangements for the divorcing
context so as to provide for a spouse
shareholder are reviewed in the
and/or children who have the benefit
of a maintenance order.
Importantly, any Letter of Wishes
The financially stronger spouse may
event of matrimonial breakdown
that
and
also have continuing obligations
and consideration given to the
trustees of the Will in how they might
pursuant to any financial settlement
separating spouse being removed
PENSIONS
exercise their discretion after death
or order made on divorce such as
as trustee of life assurance and/
Pensions advice is outside the scope
should be carefully reviewed. It may
maintenance and so it is important
or death benefit trusts and also,
of this guide but it is worth being
also be necessary to ‘sever’ joint
that the Will is clear as to what those
perhaps, removed as beneficiary.
aware that the Family Court has
tenancies of jointly owned assets.
obligations are.
The rules in relation to Wills that
the power to share a pension fund
treat the divorced spouse as having
with a spouse. Any shareholder who
guides
the
executors
It should be noted that if the
DEATH BENEFITS AND LIFE
already died do not apply to lifetime
is entitled to a company pension
shareholder were to die before
ASSURANCE
trust arrangements or death benefit
should therefore take advice and the
the divorce is finalised, then the
If shareholders in a family business
nominations.
form of scheme considered and the
separated
matrimonial
have life assurance and death
claim will be replaced by a claim
benefit arrangements, it is likely that
In many cases a lifetime trust will be
reviewed in relation to their ability to
under the Inheritance (Provision for
they would be nominated in favour of
accompanied by a Letter of Wishes.
provide for a spouse.
Family and Dependants) Act 1975
a family member which may include
That Letter of Wishes might make
for reasonable financial provision.
or be limited to the shareholder’s
reference to the provisions of the
In
It is also worthy of note that more
spouse. It is also possible that
Will or be entirely separate, perhaps
breakdown, any steps taken in
than one generation of shareholder
shareholders might create lifetime
suggesting how the life assurance
relation to Wills, trusts, life assurance
may have provided for the departing
trusts to receive these benefits.
spouse’s
discretions of the pension trustees
the
event
of
relationship
might be utilised for the benefit of the
and pension arrangements should
spouse under their Will and so all
spouse, to meet any Inheritance Tax
be
relevant Wills should be reviewed in
liability or to repay any mortgage.
matrimonial adviser assisting the
this circumstance.
Trusts,
relevant shareholder prior to any
nominations
and
any
associated Letters of Wishes should
with
the
specialist
changes to these being made.
be reviewed upon divorce. The
ability to provide security via such
death benefits and life assurance
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