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The Federation of European Independent Financial Advisers

Making contingency plans for the unexpected is an essential part of wealth management. However, this aspect of financial planning should not be confined simply to strategising for the possibility of inflation, volatility, currency exchange movement and other macro factors; it should also account for personal factors. For example, how might your circumstances and goals change over time and are your retirement financial plans flexible enough to respond to these changes?

Examples of changes in personal circumstance include long-term care and medical costs, or large one-off capital expenses. And another important question, albeit loaded, is that of divorce.

There is good reason to address this question; 2017 data from the Office for National Statistics reveals that despite overall divorce rates for opposite-sex couples being at their lowest level since 1973, divorce among older people is actually rising.*

So, the question is, are your expat wealth management plans sufficiently robust to weather the impact of divorce?

The rise of the grey divorce

While few people actively plan for divorce, although the increased use of pre-nuptial agreements may demonstrate otherwise, marriage dissolution is a process, that is being undertaken more and more by people in their late 40s to 50s.*

So-called “grey divorces” are occurring with greater frequency and the ONS have hypothesised a number of reasons, including the fact that the UK has an increasingly ageing population and people are getting married later in life.*

Pensions on divorce

Divorce can halve a person’s projected retirement income and as a consequence has the potential to jeopardise the retirement plans of both parties. In divorce financial settlements all financial assets should be considered for division, including pensions – which are often one of the most valuable assets in a marriage.

According to the Financial Times, the family courts ordered the sharing of 4,632 pensions in 2018, up from 2,283 in 2011**. This means that even if a person has been the main breadwinner, they may still have to forego all or part of their fund to their ex-spouse, causing a significant long-term cash flow problem.

Expat wealth management for all weathers

Whether you are looking to build contingency for the unexpected or need help restructuring your wealth and retirement plans following a divorce, Blacktower Financial Management can help you clarify your goals and then assist you as you move towards them with confidence.

Blacktower Financial Management is a specialist expat wealth management firm with more than thirty years of experience serving the interests of our clients. We have offices across Europe, including Spain, Sweden, Germany and France. Contact us today to find your local representative.

* Accessed 29-05-19

** Accessed 29-05-19

​​​​​​​​The above article was kindly provided by Blacktower Financial Management Group​ and originally posted at: ​​​​​​​​​​​