Understanding Property Settlements in Divorce

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This article discusses what matrimonial assets may be divided, the procedure, out-of-court settlements and how the Court will determine the division of matrimonial assets.

How are matrimonial assets defined?

Under Section 112(10) of the Women’s Charter, matrimonial assets are defined as:

  • Any asset acquired before the marriage by one or both Parties, provided that it is used or enjoyed by both Parties and their children while the parties are residing together. These assets may be used or enjoyed for shelter, transportation, household, education, recreational, social or aesthetic purposes.
  • Any asset acquired before the marriage by one or both Parties which has been substantially improved during the marriage by the other party or by both Parties.
  • Any asset acquired during the marriage by one or both Parties.

Section 112(10) of the Women’s Charter also clarifies that matrimonial assets do not include any asset that has been acquired by one Party as a gift or inheritance which has not been substantially improved during the marriage by the other party or by both parties.

However, if the asset acquired as a gift or inheritance is the matrimonial home, it will still be considered a matrimonial asset.

Related Article: Gifts In The Division Of Matrimonial Assets

What are some examples of matrimonial assets?

Examples of what the Court has deemed to be matrimonial assets include the following:

  • The matrimonial home where the Parties and their children resided during the marriage or jointly owned property.
  • Cars.
  • Shares.
  • Savings in the parties’ bank accounts.
  • Central Provident Fund accounts.
  • Businesses or business interests.
  • Jewellery.
  • Winnings from the lottery obtained during the marriage.
  • Certain gifts given during the marriage, provided that the gifted item was not in itself a gift or inheritance received by the giving Party.
  • Liabilities such as debts or loans.

What is the procedure for the division of matrimonial assets?

After a divorce is granted, the Court will fix a date for an Ancillary Matters Pre-Trial Conference (APTC). During the APTC, the Court may refer Parties for counselling or mediation.

If this is not appropriate or applicable, directions will be given for Parties to file an Affidavit of Assets and Means and Parties will be given the opportunity to file a reply to their respective affidavits.

Thereafter, the Court, on reading the various affidavits and hearing arguments from Parties or their lawyers, will make an order on the division of the matrimonial assets according to what they deem to be “just and equitable”.

Related Article: Factors Influencing Division of Matrimonial Assets

Alternative Dispute Resolution – Directed by Court

As mentioned above, the Court may refer Parties for counselling or mediation and work with Parties to resolve the matter amicably.

Parties who are able to come to an agreement will save valuable time and legal fees. Additionally, settling the issue amicably may go towards reducing bitterness between parties.

The Court will only conduct mediation for cases not involving matrimonial assets valued at S$2 million or above.

For cases where the matrimonial assets exceed S$2 million, the Court may order Parties to attend private mediation at the Singapore Mediation Centre. Parties and their lawyers must personally attend all mediation sessions, unless otherwise directed.

All information and matters discussed during counselling and mediation are confidential. Additionally, if a case goes for a hearing, anything said or any document provided during these sessions cannot be used as evidence. A different Judge will also be appointed to hear the matter.

Related Article: Why Consider Divorce Mediation and Other Alternatives to Court?

How long will mediation take?

The length of the mediation will vary depending on the case, with the majority of cases being completed within around 2 – 3 sessions. The number of sessions depends on several factors such as the level of conflict between the Parties and the complexity of the issues.

Related Article: All you need to know about Divorce Mediation in Singapore

What happens after counselling or mediation?

If Parties are able to reach an agreement on how the matrimonial assets are to be divided (as well as other ancillary matters), they can proceed to a Draft Consent Order which will set out Parties’ agreement which will be endorsed as a Court Order.

If Parties are unable to reach an agreement after counselling and mediation, the Court will provide Parties with the necessary directions to prepare for a hearing.

During the hearing, the Court will decide on how to divide the matrimonial assets.

What factors will the court consider when dividing matrimonial assets?

In determining what is “just and equitable”, the Court will take the following into consideration:

  1. The extent of contributions made by each party in money, property or work towards acquiring, improving or maintaining the matrimonial assets.
  2. Any debt undertaken by either party for their joint benefit or for the benefit of their children.
  3. The needs of their children – the Court usually considers this factor when deciding whether it would be better to order a sale of the matrimonial home or to order a transfer to the Party with care and control of the children.
  4. The extent of the contributions made by each party to the welfare of the family, including looking after the home or caring for the family.
  5. Any agreement between the parties with respect to the ownership and division of the matrimonial assets made in contemplation of divorce.
  6. Any period of rent-free occupation or other benefit enjoyed by one party in the matrimonial home that was not enjoyed by the other party.
  7. Assistance or support provided by one party to the other party, including assistance or support given which helps the other party with their occupation.

Related Article: How do Courts Divide the Matrimonial Assets in Divorce?

How will the Court determine the proportions for the division?

Stemming from the decision of ANJ v ANK [2015] SGCA 34, the Courts have begun to adopt a more structured approach when dealing with the division of matrimonial assets.

The structured approach is meant to give sufficient recognition to each party’s contributions towards the marriage while avoiding overvaluing or undervaluing indirect contributions.

However, the Court has the discretion to take a broad-brush approach in assessing each Party’s contributions to the marriage according to what it feels is “just and equitable”.

Thus, the structured approach is not applied rigidly. The proportions for the division of matrimonial assets are decided on a case-by-case basis and equal division is not the starting point.

First, the Court will determine the pool of matrimonial assets. This means that the Court will look at both Parties’ submissions and decide exactly which assets in question should be considered matrimonial assets.

The Court will only divide assets that are determined to be in the pool of matrimonial assets.

Second, the Court will derive ratios for the Parties’ respective direct and indirect contributions.

  1. Direct contribution is the amount of direct financial contribution each party makes towards the acquisition or improvement of the matrimonial assets.
  2. Indirect contribution may consist of indirect financial or indirect non-financial contributions:
  • Indirect financial contributions may refer to payments made towards renovations, payment of household expenses, payment for the maintenance of property, and payment of taxes and utility bills.
  • Indirect non-financial contributions may be in the form of caring for the children, overseeing the children’s education and enrichment, looking after the household’s needs, caring for the family, assisting in household chores, caring for any elderly or infirm relative or dependent of either party, and assisting or supporting the other party in their occupation.

The Court will calculate the average of the direct and indirect contribution ratios to determine the Parties’ overall contribution ratio.

The Court will then divide the matrimonial assets using this overall contribution ratio.

Depending on the facts and circumstances of each case, the direct and indirect contribution ratios may not be accorded equal weight in the determination of the overall contribution ratio.

Factors that may influence the weightage of each ratio include the following:

  1. Indirect contributions may be accorded more weight in long marriages with children in comparison to short marriages without any children.
  2. Where the pool of matrimonial assets is extremely large and is accrued by one Party’s exceptional efforts, with little to no contribution from the other Party, direct contributions may be accorded more weight.
  3. The engagement of a domestic helper reduces the burden of homemaking and caregiving responsibilities undertaken by the parties, and to that extent, the weight accorded to the Parties’ collective indirect contributions in the homemaking and caregiving aspects may be reduced accordingly.
  4. The indirect contribution of homemakers who have raised the Parties’ children to adulthood may be accorded a greater weight. This is especially so where they have made significant career sacrifices in the process.

The general trend is as follows:

  1. In short marriages (less than 10 years), the division ratio may resemble the proportion of direct financial contributions because indirect contributions may be limited.
  2. In moderate marriages (10-18 years), the proportion of direct financial contributions provide a useful starting point but indirect contributions are factored in accordingly.
  3. In long marriages (more than 18 years), indirect contributions are given great weight and the court is more likely to arrive at a division ratio that is close to an equal division.
Should you have any questions or would like more information, please contact M/s Gloria James-Civetta & Co for a free consultation.

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