3 finance questions to ask before a divorce

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Parties to a divorce are impacted financially in two primary ways:

  1. The division of their matrimonial assets
  2. The order for maintenance payments that the court may make.

In each, the law sets out provisions that the court is required to take into consideration.

1. What assets are considered matrimonial property?

Matrimonial property includes the following:

  • All assets bought during the course of the marriage;
  • Assets bought before the marriage by one or both parties and used by both parties and their children while the parties are living together; or
  • Assets bought before the marriage by one or both parties which has been substantially improved during the marriage by either or by both parties.

Examples of matrimonial assets include the marital home, family car, insurance policies, shares, cash savings, Central Provident Funds (CPF) and jewellery – all of which can potentially be divided between the parties in the event of a divorce.

Exempted matrimonial assets are gifts or inheritance to one of the parties, unless the gift is the matrimonial home, or it has been substantially improved by one or both parties.

2. How will such matrimonial property be divided?

The parties can come to an agreement between themselves on the division of their matrimonial property through a pre-trial conference, or they could leave it to the courts to decide the matter.

In the case of the latter, the courts are required by law to make a decision that is just and equitable by taking several factors into consideration, which includes the following:

  • Contributions made by either party in the course of the marriage. This includes both financial and non-financial contributions, to property or work towards acquiring, improving or maintaining the matrimonial asset as well as caring for family members;
  • Any debt incurred by either party for their joint benefit or for the benefit of any child of the marriage;
  • Needs of the children of the marriage. This takes into consideration custody arrangements between the parties;
  • Any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce.

Upon making its decision, the court can make any of the following orders.

  • Selling of any matrimonial assets and division of the proceeds;
  • Vesting of any matrimonial asset in either party;
  • Postponement of sale or vesting of any share in any matrimonial asset until the fulfilment of specified terms;
  • Granting one party to personally occupy the matrimonial home for a period of time;
  • Paying of a sum of money by one party to the other.

ALSO READ: Practical preparations for a divorce in Singapore

3. How much maintenance is needed?

Ill or incapacitated husbands or ex-husbands can now apply for maintenance as well, in addition to ex-wifes, where necessary. Amendments to the Women Charter has made this possible. In deciding the amount, the court has to consider the following:

  • The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
  • The standard of living enjoyed by the family before the breakdown of the marriage;
  • The age of each party to the marriage and the duration of the marriage;
  • Any physical or mental disability of either of the parties to the marriage;
  • The contributions made by each of the parties to the marriage to the welfare of the family, including any contribution made by looking after the home or caring for the family; and
  • The value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of divorce that party will lose the chance of acquiring.

The maintenance order can be in a lump sum or periodic payment as the court determines. The court will try to put the parties in the financial position they would have been in, had the marriage not broken down.

In general, the court is guided to do what is best for the parties and the children of the marriage, making provisions as holistically and as fairly as possible to minimise financial hardship.

This article was first published in SingaporeLegalAdvice.

SingaporeLegalAdvice.com is a legal platform for individuals and small business owners needing legal help. The information provided above does not constitute legal advice and is to be followed at your own risk. You should obtain specific legal advice from a lawyer before taking any legal action.