How do courts divide matrimonial assets?
Section 112(1) of the Women’s Charter states that assets should be divided in a way that is just and equitable. Since the 2015 seminal case of ANJ v ANK, courts have adopted a structured approach to the division of matrimonial assets. The approach comprises three steps:
- Determining each party’s direct contributions made towards the acquisition or improvement of matrimonial assets
- Determining each party’s indirect contributions to the well-being of the family
- Using (1) and (2) to derive each party’s average percentage contribution to the family
The computed ratio may also be adjusted according to the length of the marriage, the size of the matrimonial assets and its constituents, as well as the extent and the nature of the parties’ indirect contributions.
READ MORE: HOW DO COURTS DIVIDE THE MATRIMONIAL ASSETS?
Will this approach be applied to all cases?
Not necessarily. It was highlighted in the subsequent 2017 case of TNL v TNK that the structured approach (mentioned above) should not be applied to single-income marriages as it tends to unduly favour the working spouse over the non-working spouse. In a single-income marriage, the working party would likely be accorded 100% of direct contributions and also be accorded a substantial percentage of indirect financial contributions. This would greatly disadvantage the non-working spouse and go against the overall objective of ensuring that both financial and non-financial contributions to the marriage are mutually respected.
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What is a single-income marriage?
A single-income marriage includes a marriage where one party was primarily the breadwinner and the other primarily the homemaker. This definition may still apply even if the homemaker worked for some years during the marriage, or had made substantial financial contributions to the acquisition of matrimonial assets.
Does the length of marriage affect how the ratio is calculated?
As a general rule, the longer the marriage, the more weight is given to the parties’ indirect contributions. Conversely, the shorter the marriage, the less weight will be ascribed to indirect contributions.
How much are the Courts likely to award to single-income marriages?
Based on previous court judgments, single-income marriages can be briefly categorised into 3 groups:
- Long marriages between 26 and 30 years – the Court will tend towards an equal division of the matrimonial assets (ie, a 50:50 division)
- Moderately lengthy marriages between 15 to 18 years – the non-income earning party may be awarded between 35% to 40%
- Shorter marriages between 10 to 15 years ¬– the non-income earning party may be awarded between 25% to 25%
Nevertheless, these figures are not fixed in stone and it is ultimately still dependent on the facts of each case. Factors such as the presence of the working spouse during the marriage, and whether there is full and frank disclosure of assets during the proceedings may be taken into consideration.