HOW DOES THE COURT DIVIDE MATRIMONIAL ASSETS IN A SHORT AND LONG MARRIAGE?
In divorce proceedings, after the Court has granted the Interim Judgment of divorce, the Court has the power to make orders in relation to ancillary matters between the parties to the marriage. These ancillary matters are:
- Custody, care and control, and access to the child(ren) of the marriage;
- Maintenance of the child(ren);
- Maintenance of the former spouse; and
- Division of matrimonial assets.
This article will focus on item (d) listed above, that is, the issue of how the Court will divide matrimonial assets. Specifically, this article will look at how the Court is likely to divide matrimonial assets in short and long marriages. Items (a) to (c), and how the Court makes decisions on these issues, have been examined in other articles. The issue of division of matrimonial assets is often a thorny one, and can lead to high levels of acrimony between parties. The present article will focus on the approach taken by the Singapore Court in dividing matrimonial assets between former spouses, in short marriages, and in long marriages.
The approach taken by the Court in dividing matrimonial assets
What is a matrimonial asset?
The first step in making a decision on dividing the matrimonial assets would be to identify what belongs to the pool of matrimonial assets. Preliminarily, it bears noting that the Court’s power to divide matrimonial assets applies to assets owned by either of the parties to the marriage – this means that property and assets owned by third parties (that is, not parties to the marriage) cannot be divided by the Court. For example, if the couple stay in a rented flat throughout the marriage, the Court will not divide the rented flat upon the couple divorcing. This is because neither party to the marriage owns the flat in question. As to the assets which will fall into the matrimonial pool of assets, there are 3 different categories:
- An asset acquired by either party or both parties during the marriage;
- An asset acquired by either party or both parties before the marriage, if that asset has been ordinarily used or enjoyed by both parties or their children, or if the asset has been substantially improved by the other party or by both parties to the marriage; and
- An asset acquired by one party at any time which is a gift or inheritance, if that asset has been used as the family’s matrimonial home or has been substantially improved by the other party or by both parties to the marriage.
The definition of assets for the purposes of an order of division of matrimonial assets is very wide and will include items such as, houses, cars, the monies in each party’s bank accounts, shares and stocks, insurance policies, as well as monies held in each party’s CPF Account. It bears noting that gifts made by one party to the marriage to the other party is likely to be included in the matrimonial pool of assets. For example, a luxury watch given by the wife to the husband as an anniversary present will be included as a matrimonial asset, while a car given by the husband to the wife as a birthday present would also be included as an asset.
The factors the Court will consider in making an order of division
In arriving at a decision on what would be a fair and equitable division of the matrimonial assets, the Court will have regard to all the circumstances of the case. This will include, but is not limited to, the following factors:
- The extent of the contributions made by each party towards acquiring, improving or maintaining the matrimonial assets;
- Any debt owing or obligation incurred by either party for their joint benefit or for the benefit of any child(ren) of the marriage;
- The needs of the child(ren) of the marriage;
- The extent of contributions made by each party to the welfare of the family, which would include things such as looking after the home, caring for the family and caring for either party’s elderly parents;
- Any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce;
- Any period of rent-free occupation or other benefit enjoyed by one party in the matrimonial home;
- The giving of assistance or support by one party to the other party;
- The financial needs which each party to the marriage has or is likely to have in the foreseeable future; and
- The income, earning capacity, and other financial resources which each party to the marriage has or is likely to have in the foreseeable future.
The structured approach adopted by the Court in dividing matrimonial assets
In coming to a decision on how the matrimonial assets should be divided between the divorcing parties, the Court will adopt a “broad-brush” approach, to determine what is just and equitable in the circumstance of each case. In most cases, the Court will be guided by the structured approach, which consists of the following steps:
- Express as a ratio each party’s direct contribution relative to that of the other party, having regard to the amount of financial contribution each party has made towards the acquisition or improvement of the matrimonial assets;
- Express as a second ratio each party’s indirect contribution to the well-being of the family relative to that of the other, having regard to both indirect financial and non-financial contributions; and
- Using each party’s respective direct and indirect percentage contributions, the Court then derives each party’s overall contributions relative to each other by taking an average of the two ratios. However, the Court is also to consider whether it would be appropriate to ascribe different weightages to the direct and indirect ratios in any given case, and the direct and indirect contributions may not be accorded equal weight.
How the Court is likely to divide the matrimonial assets in a short marriage
In a short marriage, the Court is likely to apply the structured approach, as set out above, when deciding how to divide the matrimonial assets. However, given that the marriage was short, the Court is likely to give much more weight to the direct contributions made by either party towards the acquisition of the matrimonial assets. Conversely, the weightage given to indirect contributions made by either party is likely to be much less, in a short marriage. This means that in a short marriage, when dividing the matrimonial assets between parties, the final division of assets is unlikely to differ too much from the ratio of direct financial contributions made by the parties to the acquisition of the matrimonial assets.
How the Court is likely to divide the matrimonial assets in a long marriage
The situation is different when the Court considers the issue of division of matrimonial assets in relation to a long marriage. This is especially so if the marriage was a single-income one, in which one party was the sole breadwinner, while the other was a homemaker. The Court has previously noted that the structured approach as set out above is unsuitable in the context of a single-income family in a long marriage, as the structured approach unduly favours the working spouse over the non-working spouse. This is because the monetary contributions of the working spouse would represent a large portion of the direct contributions made towards the acquisition of the matrimonial assets. The monetary contributions of the working spouse would then be considered again, in the context of indirect financial contributions made to the household, since the working spouse would generally be the one responsible for payment of household expenses such as groceries and utilities. Therefore, in long single-income marriages, the Court has generally tended towards an equal division of the matrimonial assets. It has been noted that such a division is consistent with the philosophy of marriage being an equal partnership. In general, it may be observed that the indirect contributions of each party to the marriage is given more weight in long marriages. This would in turn affect the Court’s eventual decision on how the matrimonial assets should be divided.
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