Podcast: Episode 3: Common Financial Issues in Divorce


divorce podcast

Episode #3: Financial Issues in Divorce

Oct 21, 2020

Gloria James-Civetta

  • What are common marital assets?
  • Can a couple decide on the division of assets by themselves?
  • How is child maintenance determined in Singapore?
  • Is there any starting rate or a minimum amount defined by the court?
  • What constitutes spousal maintenance?
  • Is Spousal maintenance only awarded to Women?
  • Being incapacitated is the only factor for a male to claim support from ex-wife?
  • Can a House-husband claim maintenance?
  • What other myths surrounding the division of marital assets?
  • How is it, when it comes to debts in a divorce settlement?
  • Myths about the division of matrimonial assets
  • Myth about matrimonial gifts

TRANSCRIPT OF THE PODCAST

Host Introducing Lawyers and Subject of Discussion:

Welcome to the law podcast brought to you by Gloria James-Civetta & Co, with us we have lawyers, Yvonne J. Schelkis-Sweeney, Cheryl Cheong, and Liesel Chong. Our topic for today is “Common Financial Issues in Divorce”, let’s tab into the first question.

Host Question No. 1

What are common marital assets?

Cheryl Cheong

All assets acquired during the course of the marriage are considered marital assets for the purposes of division. Sometimes, assets acquired before the marriage, but were used by parties as a shelter or the family home or enjoyed by parties, can be also considered marital assets. Pre-marital assets that have been substantially improved by parties can also be considered marital assets for the division. So assets could include marital homes, family cars, cash savings, investments; generally, any sort of assets that you have can be up for division.

Host Question No. 2

Can a couple decide on the division of assets by themselves?

Cheryl Cheong

It really depends on the relationship between parties and what kind of divorce they’re looking for. If they’re on good terms they can work out a list of assets that they have and come to an amicable resolution, but of-course as any starting point it would be a good idea to speak to a lawyer who can advise you a little bit better on this issue.

Host Question No. 3

How is child maintenance determined in Singapore?

Liesel Chong

On the issue of child maintenance, both parents are legally obliged to financially support the child, until any child reaches 21 years of age. Under certain circumstances, sometimes even past 21 years of age. This really depends on what the reasonable expenses of the child are, as well as, the earning capacity and assets of both parents. So, the court will first determine what the total reasonable expenses of the child are and apportion this according to the financial capabilities of each parent, and this takes into account the assets that each parent has, each parent’s earning capacity and other financial resources of the parent or the child.

Host Question No. 4

Is there any starting rate or a minimum amount defined by the court?

Liesel Chong

No, there is no starting rate, this depends on what standard of living the child has enjoyed during the marriage while parties are still on amicable terms and also the kind of lifestyle that both parents had expected the child to live on.

Host Question No. 5

What constitutes spousal maintenance?

Yvonne J. Schelkis-Sweeney

Spousal maintenance covers the area where you have either a working spouse and incapacitated spouse that requires financial support. This depends on the earning capacity of the spouses providing maintenance. Sometimes spousal maintenance can come in the form of periodic maintenance, which is a monthly maintenance or a lump sum maintenance if the husband is able to provide lump-sum maintenance.

For example, sometimes spouses need some monies to get back on their feet, maybe get some re-training so that they can go back into the workforce to be gainfully employed. So, this would be short-term maintenance or maybe periodic or it could be a lump sum maintenance that is one-off in effect.

Host Question No. 6 (Clarifying doubts)

Is Spousal maintenance only awarded to Women?

Yvonne J. Schelkis-Sweeney

This is a myth, the law has been changed. There is talk about changing the “Woman Charter” into one called “The Family Charter” in which males are entitled to support if they are incapacitated. Incapacity has to be on a permanent basis for the male to claim financial support from the ex-wife.

Host Question No. 7 (Clarifying doubts)

Being incapacitated is the only factor for a male to claim support from ex-wife?

Yvonne J. Schelkis-Sweeney

Yes, I suppose is a higher threshold for the male to be in permanently incapacitated as compared to the woman if she was taking a break from work, raising the children, going to be getting some retraining. So, that is the difference between when a man can apply for maintenance as opposed to when a woman can apply for maintenance.

Host Question No. 8 (Clarifying doubts)

Can a House-husband claim maintenance?

Yvonne J. Schelkis-Sweeney

That is not legally termed as incapacity, but if a husband had given up his career substantially and had been a house husband for a very long period, say for decades, and raised the children, it could possibly be an exception for a man applying for maintenance.

Host Question No. 9

What other myths surrounding division of marital assets?

Yvonne J. Schelkis-Sweeney

One of the most common myths that the common person in Singapore thinks is upon the dissolution of a marriage, especially in long marriages that there’s an automatic division or 50-50 percent of the marital assets.

Host Question (Clarifying doubts)

You are Saying, not necessarily is that’s what’s going to happen?

Yvonne J. Schelkis-Sweeney

Not necessary, the court has quite a technical test. In really simple terms, it will depend on the direct financial contribution between the parties. The contributions are split into two, which are direct financial contributions – what the parties had to contribute financially to acquire the properties. For example the movable property, immovable property, stock, shares, etc.

For the situation where a woman is not working, her non-financial contributions will play a great part in how the court adjudicates non-financial contributions.

Host Question (Clarifying doubts)

So it’s not just split 50-50 straight up. It’s going to be all these other considerations.

Yvonne J. Schelkis-Sweeney

The court also looks at the needs of the children in the marriage. This is not so much of a myth but under the law both parties are required to financially maintain the children. So, a lot of people think that just because 1 party is the major bread-winner, he will have to support the children 100%.

Sometimes, there are joint accounts and the mother is also making payments to watch the child’s further education. It is a myth to say that a mother never contributed to the educational expenses of the child.

Another important factor is that whether there is a prenup and a postnup into the division of assets, in Singapore pre-nuptials are not really de rigueur (followed strictly) because the courts do not automatically accept all the terms in a prenuptial agreement. More and more people are getting prenuptial agreements drafted and the court looks at it on a persuasive basis. Prenup is also one of the factors that the court takes into account during the division of matrimonial assets.

Host Question (Clarifying doubts)

So, irrespective of pre-nup agreement, the court will still have a look in and see whether it’s a viable.

Yvonne J. Schelkis-Sweeney

Yes, it would be persuasive towards the judge making the finding in the final division if, for example, the settlement was not totally one-sided as we know it, sometimes one party has a major chunk of the assets and he makes the other party sign and say “take it or leave it”, and this is how the Division of assets will go in the event that the marriage goes bust.

Host Question No. 11

How is it, when it comes to debts in a divorce settlement?

Yvonne J. Schelkis-Sweeney

That’s another major myth that most people think that debts acquired the liability is apportioned on both parties, but we have to distinguish between individual debts and joint debts that were acquired for the benefit of the family.

For example, an individual debt could be a credit card debt or a gambling debt or a personal loan that was taken out and for the benefit of just that one party; either the husband or the wife and not for the benefit of the family and or the children.

Then there is joint debts which could be a mortgage or it could be a renovation loan. Those debts will be considered joint debts and the liability is apportioned to both parties in the marriage.

Host Question No. 12

So one of the myths can we talk about?

Cheryl Cheong

It is actually a common misconception that if it’s in one person’s name, the property’s going to belong solely to that person. We have a lot of clients coming in and saying, “Hey you know I have this property it’s in my name and my wife is only an occupier, so I should keep it”, that’s actually not true.

It is actually a common misconception that if it’s in one person’s name, the property’s going to belong solely to that person. We have a lot of clients coming in and saying, “Hey you know I have this property it’s in my name and my wife is only an occupier, so I should keep it”, that’s actually not true.

Regardless of how you are holding it, it could be a sole property or a Joint property, as long as it’s considered a marital asset the court can make an order for this property to be divided.

We’ve mentioned this a little bit earlier, whether or not a property is considered marital assets, there are a few factors, whether or not it was acquired during the course of the marriage, whether it was perhaps the matrimonial home where parties had lived in. Even if it was a pre-marital asset acquired by one party before the marriage, if during the course of the marriage the other party had substantially improved it, perhaps, contribute and paid for the renovation and things like that. That would be contributions towards this property as well.

A lot of couples actually come and say, “you know when we purchased the property we have put this property in a particular percentage, 50% each”, but that’s not necessarily going to be the end percentage divided in the divorce proceedings. The court does have the jurisdiction to make an order as they deem necessary.

Host Question No. 13

Is there any myth about gifts?

Liesel Chong

Perhaps, what you’ve been hearing is that all gifts are excluded from division. As long as it’s a gift then “I get to keep it”, well, to bust that myth, it’s not true.

For this, we have to divide the gifts into 2 different categories – gifts between husband and wife and gifts from third parties. For gifts between husband and wife, this typically would be considered matrimonial assets and subject to division because it would have been acquired from matrimonial assets. One exception to this is, if the value is really small, there is a personal value than whoever is gifted that article, gets to keep it.

Host Follow Up Question

What constitutes small value, is there a ballpark range?

Liesel Chong

Not really, but it depends on what each party feels about that particular gift. It also has to be considered in relation to the entire asset pool. For example, if total assets is $10,000,000, anything that’s maybe $1000 bucks is considered quite low value in consideration to the entire pool. If it’s something much smaller than even a piece of jewellery maybe consider it quite valuable.

The other side of it would be the gifts from third parties. For example, if somebody else, your parents get you something, typically that’s excluded. Unless there are always exceptions, the family as a whole has benefited from it or the other party has also contributed to the improvement of this particular gift during the marriage. In that case that makes it a part of matrimonial assets, subject to division upon divorce.

Host Concluding:
All right. Thank you very much, ladies. Thank you for listening. We hope this has given you a better understanding of the issues you may have had pertaining to the topic. Feel free to contact us, our contact details can be found on our website at https://www.gjclaw.com.sg.

 

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