In return for a retainer of £100 a month, adviser Bhupinder Anand helps manage the financial side of an acrimonious relationship between divorcees. He explains...
One good client of ours pays us a client retainer fee of £100 a month to speak to his ex wife. We are in effect working as ‘relationship mediators' as the pair do not get on at all.
They had three children when married and, although married for some time, they divorced acrimoniously four or five years ago.
Shortly after the divorce, this client approached me and explained that although he couldn't deal with his ex-wife, managing the relationship was a necessary part of managing his finances.
How one adviser manages his clients' financials following a rather acrimonious divorce
As such we agreed that whenever issues of money arose, she must deal with us rather than approach him directly.
The couple's main bone of contention is a life assurance policy he pays into which ensures that, if he dies, she will continue to receive income from him.
She has no other form of income. Their financial arrangement includes agreements such as the car being serviced every year and replaced every three years. He also pays for all sorts of things regularly, such as Sky TV.
He resents paying her life assurance because it is expensive and he is relatively cash poor following the divorce. However, he inherited several properties (again, after the divorce) and, as such, is asset rich. He argues she will receive the money she needs from the sale of his properties in the event of his death.
She does not believe him and is worried that if he dies, she will stop receiving the income she has come to depend on. She therefore insists that he continues paying into the policy.
In dealing with this case I came across the Duxbury Rules, a set of rules often used in divorce cases - they were suggested to me by a lawyer.
These rules relate to the fact that if someone has been ordered by a court of law to provide ongoing income for another person they must set up life assurance to maintain the same level of income in the event of their death.
There are also a set of Duxbury tables released on an annual basis based upon life expectancy, interest rates, income yield and capital growth - these provide a formula for determining how much someone needs to be insured for.
Although this woman can be quite difficult and unreasonable at times, I always deal with her and I think she trusts us.
It has been an interesting case.
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