Dividing matrimonial assets after divorce – What happens to your assets?
How matrimonial assets are divided is a hotly contested topic for couples going through a divorce. In some cases, it can substantially affect a person’s standard of living.
So what’s a fair proportion to split the house? How about a business started together? Or the car they bought?
This article will answer questions about the division of matrimonial assets and financial obligations after getting a divorce in Singapore.
Division of Matrimonial Assets
Just like how marriage involves two parties putting in the effort to make their relationship work, it’s only fair that when a marriage dissolves, matrimonial assets are divided according to each party’s financial and non-financial contributions.
What’s Considered and What’s Not a Matrimonial Asset
Since there are many asset classes and variations of assets, the processes of dividing these matrimonial assets can be rather complex.
Under section 112(10) of the Women’s Charter, matrimonial assets include:
- Assets acquired by one or both parties during the marriage
- Assets ordinarily used by one or both parties or their children (while the parties are residing together for shelter or transportation or for household, education, recreational, social or aesthetic purposes)
- Assets acquired before the marriage but substantially improved in quality during the marriage
Assets which are excluded from the definition of matrimonial assets are:
- Assets received as gifts or inheritance
- Gifts or inheritance that have not been substantially improved during the marriage
Common examples of matrimonial assets include the family car, matrimonial home, shares and equities, savings, the cash balance in the couple’s respective Central Provident Fund (CPF) accounts, bank accounts (be it in sole or joint names), businesses, jewellery, etc.
The Court has also agreed that lottery winnings (e.g. from 4D or TOTO) obtained during the marriage are also considered matrimonial assets.
Case Study:
In this case study, the husband paid for the house and it was held solely in his name. The wife paid for the renovation and did all the household chores and upkeep of the house. The wife argued that she should have a rightful share in the matrimonial home.
The Court ruled that their matrimonial home could be contested as the wife was able to provide evidence that the value of the home was substantially improved by her.
In order to reach a fair result whilst dividing contested assets, the Court will take several factors into consideration during the ancillary matters hearing.
How Are Matrimonial Assets Divided
- Direct financial contribution towards the assets
This includes any monetary contributions in obtaining, maintaining and improving the said asset.
E.g. Down-payments, mortgage repayments, conservancy fees, property tax, renovations (that significantly improves the home value. etc)
- Non-financial contributions towards the welfare of the family
Indirect contributions will be considered too, since they play a role in maintaining or strengthening the marriage.
E.g. Home furnishings, looking after the household, caring for elderly or invalid family members, and even support for the spouse in their career endeavours
- Debt owed
In some cases, loans might be taken up and debt might be incurred. The Court will look into whether it was taken for the benefit of both parties, for the needs of the child, or for one individual’s benefit. Repayment terms will be decided accordingly.
- Needs of their child (if any)
In determining the needs of the children, the Court will take into account requirements for care and control of the child.
- Prenuptial agreements / Postnuptial agreements
While deciding on the division of the couple’s matrimonial assets, the court can refer to their prenuptial / postnuptial agreements, if they had any drawn up. Refer to section 112 of the Women’s Charter, or speak to our legal team for more information.
You might be interested in: 10 common pitfalls to avoid when filing for divorce in Singapore
Procedure for Division of Assets
After an Interim Judgment for the divorce is granted, the Ccourt will fix a date for a Status Conference. At the Status Conference, the Court will recommend an out-of-court settlement first, with mediation and counselling. The counselling and mediation may last between 1-3 sessions, depending on the parties’ willingness to negotiate.
If settlement is not possible, the Court will give timelines for the parties to file an Affidavit of Assets and Means (AOM). There will be 2 rounds of AOMs filed by each party. An Application for Discovery can be submitted that requires the parties to present all assets, bills and bank records if the information provided in either party’s AOM is not complete.
In an uncontested simplified divorce case where both parties agree to all the terms, there will be no need for counselling and mediation; the process will be much quicker, cheaper, and less painful.
What to Consider Regarding Dividing your Matrimonial Home
Agreeing how ownership of a home should be divided is not the end of the story.
- Can you afford the upkeep of the property?
- Do you have enough to buy over the house?
- Should you keep, sell, or surrender the house if it has not met the minimum occupation period of 5 years?
- Will you be eligible for a new home loan after your divorce, based on your sole income?
These are just some of the questions you should consider before deciding on your divorce ancillary matters.
Read our other article for more information on wife, child and husband maintenance.
Divorce isn’t an enjoyable process for anyone, but hopefully with a clearer understanding of what to expect, you’ll be able to get through this trying time and focus on what’s truly important to you.
Do you need any help with your divorce proceedings or advice regarding dividing your matrimonial assets in Singapore? Talk to us, our experienced team of lawyers are here to help.