What Happens to my own, Personal Bank Account in a Divorce?
After a marriage is dissolved, the court will decide on ancillary issues, which includes the division of matrimonial assets. While it is quite clear that something used by both parties should be a matrimonial asset, such as money in a jointly-held bank account, a shared car, or the matrimonial home, sometimes an asset held by just one of the parties is also liable to be divided as a matrimonial asset. This might include your personal bank account.
Matrimonial assets and division
Before explaining why your personal bank account could be liable for division as a matrimonial asset, it would be prudent to briefly explain the general process of division of matrimonial assets.
In the first place, the Women’s Charter explains that matrimonial assets can be:
- acquired before or during the marriage;
- ordinarily used/enjoyed by either/both parties or their children for various purposes;
- substantially improved during marriage by either or both parties to the marriage
Therefore, this includes things like your CPF balance, the family car, matrimonial home, shares and savings accumulated during the marriage.
Matrimonial assets exclude assets acquired as gifts or by inheritance and gifts/inheritance that is not substantially improved during the marriage.
(For more information, consider our other post “WHAT ARE MATRIMONIAL ASSETS?”)
Under section 112 of the Women’s Charter, the court would divide the matrimonial assets in a “just and equitable” manner based on a variety of considerations: the parties’ needs; their children’s needs; the parties’ respective direct and indirect contributions to the assets; debt; pre-nuptial agreements; et cetera.
Your personal bank account – where does it fit?
It may or may not be included in the pool of matrimonial assets to be divided with your spouse.
Even if you started your bank account and obtained the funds within even before the marriage, it could be considered a matrimonial asset if for example, the bank account was “substantially improved in quality” during the marriage. One example could be if the other party helped to invest the monies in this account and increased it substantially.
Your personal bank account – what to do?
Now that your personal bank account might be considered a matrimonial asset, you might be worried that your spouse could unfairly get a share in it as it will be divided among you as with your other matrimonial assets. Here are a few things that you might be considering:
1) Hide it from your spouse and the court
DON’T! Being dishonest to the court is almost always the worst thing you can do. Parties in a divorce are expected to make full and frank disclosure of their assets so the court can make a “just and equitable division” of the matrimonial assets. If your spouse suspects that you have hidden some of your assets, he/she can request for:
He/she could request documents like your income tax returns, credit card receipts, and insurance statements so he/she might find any hidden assets.
He/she could request further information on assets that you are suspected of hiding. This is in the form of specific questions compelling you to explain substantial withdrawals from your bank account or where certain funds came from, for example.
If your spouse suspects, with good evidence, that you have dissipated/mismanaged your hidden assets (such as spending it on a mistress or gambling it away), he/she can request an injunction to freeze the assets.
If your concealment of your personal bank account is proven, the court will draw an adverse inference against you. Usually, this results in adding a lump sum to your spouse’s share (if the value of hidden assets is ascertained) or increasing your spouse’s share of the disclosed assets. This can be a significant increase in the share awarded to your spouse
2) Persuade the court to exclude your personal asset from the pool of matrimonial assets
The division of matrimonial assets is an exercise of the court’s discretion granted by section 112 of the Women’s Charter. The court may choose not to exercise this discretion and instead leave out a particular asset from the pool of matrimonial asset to be divided, if a valid reason is given. The reason given must be a good one before the court is persuaded to exclude a matrimonial asset. One example is to show that your spouse had absolutely no contributions towards your personal bank account and the funds were premarital.
3) Show the court that it would be “just and equitable” for you to keep your assets in your personal bank account
Courts are typically reluctant to withhold their power of division from particular matrimonial assets and will usually favour dividing the assets in a “just and equitable” way AFTER they calculate the total value of the pool of matrimonial assets, including your personal bank account.
Determining the pool of matrimonial assets for division is usually a complex and long process. This is usually complicated if you and your spouse also have your own personal assets that do not satisfy the traditional notions of what constitutes a matrimonial asset (such as your own personal bank accounts).