Older couples, especially if they have been widowed or married to others, often don’t wish to live together. They prefer to marry.
I have found, however, that those who enter into such marriages are often oblivious to the financial consequences that can be incurred if the relationship breaks down at a later date. The risks are all the more acute when one party is much wealthier than the other.
Let’s put aside the dependency claim that the less wealthy party has against the other on that person’s death. Good legal advice should ensure that a carefully drafted will can avoid nasty claims between a dependent co-habitee – whether married or not – and the family of the deceased.
Instead, let’s consider what might happen in a worst case scenario, if the marriage breaks down. It’s a gloomy approach, I know, but it is worth bearing in mind that second marriages have a higher failure rate than first marriages. This may be because in some cases, a new spouse is unlikely to be warmly welcomed into the other’s family, giving rise to bitter arguments.
If the parties were simply cohabiting then, unlike on death, there is no entitlement to any form of provision. They go their separate ways, taking what belongs to each of them. A cohabitation agreement and trust declaration at the outset can sort out how asset and property division will occur in the event of a breakdown.
But what happens if they are married? The case of MD v D (2008) EWHC 1929 is a salutary reminder of the financial pitfalls of a short marriage between older couples.
The bare facts of this case: the wife was a newly qualified barrister, aged 48 when the couple married. The husband, aged 64, was a circuit judge nearing retirement. The marriage lasted 4 ½ years. The husband had assets in his name of £562,272. The wife had £45,479. The family home, jointly owned, was worth £287,000 net of mortgage. The wife had paid some £110,000 into the house. Total assets came to around £895,000. The wife had a small pension; the husband had a much larger pension and income from his judging, although this was due to end due to his age. The wife had a net income of £20,000 but argued her needs were £38,000. At first instance, representing herself, she appears to have sought 73 per cent of the assets, together with maintenance and pension provision.
The court awarded the wife all the net equity in the house to meet her housing needs, and maintenance totalling £45,000 over three years. Dissatisfied, the wife appealed, arguing that this was insufficient to meet her pension needs. The President of the Family Division awarded her an additional lump sum of £35,000, which gave her 41 per cent of the assets. It left the husband with 59 per cent together with his relatively modest pension and the earned income that was shortly to cease. The husband had already forfeited part of his pension, to give the wife a widow’s pension on his prior death. However, the wife’s decision to seek a divorce settlement meant that this benefit was lost to both of them.
To a lay person, was this a fair award after just 4 ½ years of marriage? The answer might be no, it isn’t. However, the law requires that both parties’ reasonable needs for the future are considered. As parties age, the ability to meet needs out of all the assets for the rest of their lives will be taken into account by the court. Those needs are likely to be substantial, far more so than if the marriage had foundered without children and after just 4½ years when the parties were younger.
So if you are thinking of marrying later in life, please take good legal advice before you do so. You may also wish to consider a prenuptial agreement. As you know I’m not a fan of these, but if you both receive independent and sound legal advice before signing, such an agreement could be upheld under English law. There are no guarantees though.