No one likes to talk about death, and planning for our own is something many of us put off, or cannot bear to think about at all. Even writing a Will and thinking about to whom we should pass on our possessions can be really hard for some people. But if you turn it around and instead think about how many years of life you are likely still to have left to enjoy, there are some important things to consider.
Pension provision and financial security in later years is one of those things, and knowing approximately for how many years after retirement you are likely to survive is a useful bit of information.
So with that in mind, the Office for National Statistics has developed and just launched a life expectancy calculator. In addition to showing life expectancy, it also calculates a person’s chance of living to 100 (and thus receiving their telegram from the Queen). The tool was developed in conjunction with the Treasury and the Cabinet Office as part of a project to support pension reform, but you can have a go at calculating how much time you have left here. Results come with a graph and tell you, cheerfully, that you have a 1 in 4 chance of reaching the grand old age of 96, or whatever is appropriate based on your current age and gender (no health questions). There are links to other pages on the Government’s website which help with planning how long your money needs to last. The results assume, of course, that there are no intervening accidents or life-shortening illnesses.
Many of you will know that life expectancy is one of those things which can feature in calculations that the family courts make when arriving at a financial settlement for former couples going through divorce and the process of separating their assets. For example, if the court is calculating an appropriate lump sum to represent a maintenance payment that might otherwise be monthly for the rest of the recipient’s life, they use actuarial tables based on the recipient’s life expectancy to work out the appropriate sum.
Occasionally, however, the issue of a reduced life expectancy presents itself in family proceedings. These are always difficult cases which need to be handled sensitively. To what extent should the fact that one spouse is not expected to live very long be taken into account in arriving at a financial settlement on divorce?
This point was discussed in the recent case of M v M. The husband and wife involved were married in 1986, when the wife was 29 and the husband 42. They separated in 2008 after 22 years of marriage, by which time their daughter was independent. When they separated, they sold their family home and divided the proceeds approximately equally. The divorce itself commenced five years later, and at that point the wife issued her application to court for a financial order in respect of the divorce.
Sadly, the wife was diagnosed with ovarian cancer in January 2014, a year before the final hearing which was in January this year. The judge was HHJ Stephen Wildblood QC, who featured in last week’s blog for his skillful and robust handling of the Minnock case.
He adopted a similar no-nonsense approach to this case.
The medical evidence put the wife’s life expectancy as somewhere between 2 ½ and 3 ½ years based on median survival rates for ovarian cancer, and over ten years on the basis that a third of patients survive a decade or more after diagnosis. The judge was largely dismissive of this saying, “I could not possibly approach this case on the basis that Mrs M would sip her last glass of terrestrial champagne on a certain date……her life expectancy cannot be treated as fixed by findings based on a balance of actuarial or medical probability. No sensible person would run their personal finances on that basis. Findings about life expectancy based on median figures would be even more unsatisfactory and unjust; that approach could result very significantly to Mrs M’s detriment within these proceedings.”
At the time of the hearing the wife was 58. She asked the court to ignore her entitlement to a state pension at age 66 as she argued she may not be alive then. The judge refused to accept that contention, saying it would be wrong to airbrush future income entitlement from the calculations based simply on apparent life expectancies. The judge decided that the former couples’ pensions should be equalised with an adjustment – but the adjustment would take account of pre-marital acquisition of wealth on the husband’s part, rather than of the wife’s apparent reduced life expectancy.
In this case, the prognosis of the wife did not have any major bearing on how the court dealt with the finances. Although not explicitly stated, it seems the approach is that where a spouse has built up an entitlement to share in the matrimonial pot of wealth over a long marriage where both have contributed, there is no automatic reason why that entitlement should be curtailed by the recent unhappy news of serious illness.
If you would like to make an appointment to speak to Gail, Simon, Sue, Adam or Tricia about the issues raised above, or any other aspect of family law, please call 01223 443333.