How to protect your matrimonial assets from the financial impact of divorce

When Nora* and her ex-husband divorced, she filed for the right to appeal to keep the BTO flat the couple had bought when they were still married. The flat, due for completion next year, was located near a primary school, and Nora thought it would make an ideal home for their son, who would be enrolling in primary school by then.

Little did she expect her ex-husband to fight her on the issue – he wanted the flat, as its prime location meant a potential windfall when it could be sold. Although the judge ruled in Nora’s favour, the tussle meant thousands spent on legal fees, and even more months spent in bitter acrimony.

The dispute over the flat was just one of many that Nora dealt with in her divorce. From the amount of maintenance to support their son to how their matrimonial assets would be divided, nearly every issue had to be resolved with court intervention. In all, Nora estimates that she spent some $20,000 on legal fees.

Not every divorce is like Nora’s – in Singapore, only a small fraction of divorces are contested and require litigation in court to reach a resolution. In 2022, 63 per cent of divorces filed in the Family Justice Courts were uncontested; among contested cases, the majority were eventually resolved without court intervention.

“More than 90 per cent of all divorces are eventually resolved through parties sorting things out without adjudication,” said Justice Debbie Ong, former Presiding Judge of the Family Justice Courts, in 2020.

Still, the reality of ending a marriage and separating years of commingled finances and assets often comes as a rude shock to couples.

And when children are involved, the stress is further compounded for their primary caregivers – in Singapore, this would usually be the mothers.

High on the list of stressors is housing, in part due to Singapore’s soaring property prices.

“A woman who has care and control of her children has to find a home not only for herself, but for her children as well,” notes lawyer Ahmad Nizam Abbas, managing director of Crescent Law Chambers. “That’s not easy for the ordinary Singaporean.”

Amelia Leong, who filed for divorce in 2018, recalls how she and her daughter had to move in with her parents until she could find a place she could afford.

“I was taking home less than $4,000 at the time. Apartments were at least $2,000 to $3,000 a month (to rent),” shares Amelia, who works in communications. “I really wanted a space where I had privacy for me and my daughter… in the end I found a dual-key unit for $1,000 a month. It was really just a bedroom with an en-suite bathroom, but it had its own entrance. That was the best I could do.”

Apart from housing, a spouse who has given up their career to care for the family full time also faces challenges in finding jobs, as their working experience is long out of date.

“When you leave the workforce to care for the family, you leave a big gaping hole in your resume. And when you try and rejoin the workforce, you may have limited options. You are subject to market forces and the state of the economy at that point in time,” says family law specialist Tan Hui Qing of Harry Elias Partnership. “These are things that are beyond your control.”

Lawyer Amy Lim, founding partner of Amy Lim Law Practice, adds: “Of course, this applies to men as well, but we don’t see many house husbands in Singapore yet.”

No, the Women’s Charter does not favour women

By virtue of the fact that laws governing marriage and divorce fall under the Women’s Charter, many people assume that these laws favour women and disadvantage men, but lawyers Her World spoke to say this is simply not true.

While fears like “women are entitled to at least half of the husband’s assets” run wild on forums like Reddit, no such provision exists. In reality, the courts divide matrimonial assets based on what each party contributed to the marriage financially and indirectly.

“The law is gender neutral when it comes to the division of matrimonial assets,” stresses Ivan Cheong, head of the divorce and family team in Singapore at Withers KhattarWong.

Confusion can arise when parties are not familiar with what constitutes a matrimonial asset. “Parties may be perplexed to find that a property which was bequeathed by a spouse’s relative prior to the marriage is regarded as a marital asset to be divided, simply because the couple lived in the property during the marriage,” says Ivan.

“Some women (and men) are also surprised to learn that gifts of jewellery, shares, valuables, or even property received from the other spouse during the marriage while things are well, are no longer theirs to ‘keep’ in the event of a divorce,” he adds.

Generally, anything of value that was acquired by the couple during their marriage and utilised to their benefit is a matrimonial asset; examples include the family home and car, Central Provident Fund (CPF) monies, cash savings, and even lottery winnings.

Hui Qing points out that parties need to know how their claims could be viewed based on legal principles, and what their rights are. “For example, people assume wrongly that only assets in joint names are matrimonial assets, but they are anything acquired by one spouse or both spouses during the course of the marriage through their efforts.”

In Nora’s case, she learnt that her ex-husband’s renovations on their matrimonial home counted as a contribution to the family, which supported his claim for a bigger share of the overall matrimonial assets. Although Nora had been the one who paid the mortgage for their flat, her ex-husband, an interior designer, claimed he had spent $100,000 on the renovations, which was accepted by the courts.

Nora had disputed the figure, pointing out that he had managed the project himself. “I found a few receipts showing that he paid the cost [price] for the furnishings, but he claimed that he had someone else manage the renovation and paid full fees,” rues Nora.

Her ex-husband was eventually awarded about 43 per cent of the marital assets, which not only included the flat that was primarily paid for by Nora, but also her CPF monies, which were more substantial than that of her ex-husband’s.

“I didn’t think it was fair, but I had to think of my child and move on,” says Nora.

Eliz Li, whose husband initiated divorce in 2017, had no idea how the home she shared with her husband and three children would be divided between them.

“The house was under both our names and I contributed [to the down payment and mortgage], but when I became a stay-at-home mother about three years into the marriage, he took over paying off the mortgage,” she says. “There was a lot of uncertainty and anxiety, and I didn’t know what I could fight for.”

Eventually, she learnt that although she contributed less financially to the house, her 14 years as a stay-at-home mother caring for the family were considered indirect contributions to the marriage. The court ordered that she was entitled to 33 per cent of the marital pool.

While no one should conduct a marriage like a business, couples should have regular and honest discussions about finances, and keep records of how big purchases are paid for, lawyers say.

“When it comes to big ticket items, like major family assets, buying a house, a matrimonial home or an investment property, investing in stocks and shares, you should keep good financial records. If you have paid towards these assets in their acquisition of these assets, you should keep those records,” says Hui Qing of Harry Elias.

Women should aim to have a source of income or some means of building up a financial buffer if they stop working, says Amy.

“I am also of the view that women should take an interest in financial decisions of the family, and not just leave it to their husbands. You should know how much he earns, and how that money is spent, because marriage is a partnership, so you should also take ownership of the financial future of the family.”

She adds: “This is actually a conversation that should be had by all couples intending to marry, so that there is clear understanding of how the finances of the family will be run.”

What about maintenance?

While it is also common to hear gripes that the Women’s Charter allows women (and men who are incapacitated) to claim spousal maintenance via the courts, the reality is that this is not a given.

“If you are financially independent, earn a decent income, or earn more than your husband, your chances of getting spousal maintenance are next to zero,” says Hui Qing of Harry Elias.

Where spousal maintenance has been awarded to women, they can be temporary, lasting anything from one to three years, until the woman is able to support herself.

“If you look at case law… the message is that she now has to work towards her own financial independence,” says Nizam. “The coffee shop talk is always, ‘Aiyah, the men always lose out because we always end up paying the women.’ But that’s actually not true.”

Adds Amy: “Women sometimes think of [spousal maintenance] as ‘compensation’ for the years they have remained in the marriage, but maintenance is actually based on need. The court cautions against women treating their ex-husbands as insurance policies, such as when they say, ‘I will need maintenance in case I cannot work in future.’”

Spousal maintenance should also not be confused with child maintenance, which is the responsibility of both parents until a child turns 21, and usually determined based on the expenses of the child, and the parents’ earning ability to support it.

For example, in Amelia’s case, the court ruled that she pays for 44 per cent of her daughter’s expenses, while her husband pays 56 per cent. In Nora’s case, her husband pays $650 a month, which was about 35 per cent of her child’s monthly expenses.

In some cases, a judge may also take children’s needs into consideration when dividing matrimonial assets. “The court may say, given that the children would need a roof over their heads, a slightly larger share of the assets may be awarded to the wife to take into account those needs,” explains Hui Qing. 

The financial impact of a divorce

For many, divorce comes with a big adjustment in lifestyle. “Post divorce, there are two separate households, each with increased expenses and the stress of having to manage increased costs and responsibilities, without the support of the former spouse,” points out Ivan.

The party who has care and control of the child – the parent who is responsible for the child’s day-to-day life – may also grapple with the added stress of finding a home they can afford for themselves and their children, as well as juggling childcare on top of their careers.

And while this affects both men and women, it is more common in Singapore for women to be primary caregivers – a situation that potentially affects their income and earning potential, notes Amy.

“The situation becomes more difficult if the father does not help out with the parenting,” she says. “When it all falls on the mother to take time off work to tend to a sick child or rush home at 6pm to prepare dinner for her kids, it will affect her career prospects because she may be seen as unreliable or not committed enough to her job.”

Amelia shares that she was let go from her job shortly after she began divorce proceedings. The ensuing period of tumult had come right after she returned from maternity leave, and her employer felt she wasn’t focused enough on work.

“It took me four months to find a new job,” she says. 

When things get nasty

If a divorce turns adversarial and couples cannot resolve differences through mediation, the financial repercussions can rapidly escalate.

In the early days of her divorce proceedings, Amelia, faced with constant harassment from her ex-husband about her “fitness” as mother, hired a lawyer from a prestigious law firm to the tune of about $800 an hour.

“I was terrified of losing my child to him because at the time, we were living with his parents, and I was afraid that he would say that his parents had the ability to help care for her, and he would have the upper hand,” she recalls.

But the financial reality of a contested divorce soon made itself felt. A court hearing that was expected to take half an hour turned into a four-hour tussle, with her ex-husband taking issue with nearly every item on the agenda. While Amelia was paying for a lawyer, her ex-husband was representing himself.

“He had no qualms about dragging out time… while four hours in court was literally my entire month’s pay at the time,” she recalls, adding that she had already spent nearly $10,000 on legal fees at that point. “After that, I knew I couldn’t continue like that.” She eventually switched to more affordable representation. 

And each time her ex-husband disagreed over an issue or flouted a court order, Amelia had to return to court again to hold him accountable – incurring more legal bills in the process.

Hui Qing of Harry Elias notes that enforcement is a problem when it comes to court proceedings.

“People are frustrated that they get a court order, but the other party doesn’t want to comply with it. Then they have to take out further court proceedings just to enforce a court order, which they had already expended so much resources to get,” she says.

“The reality is that it is common for mothers to have care and control of the children… if he defaults, then it falls on her to expand resources to go in and force the maintenance orders.”

Looking ahead

If a divorce looks imminent, seek legal advice and get your financial affairs in order. “Think about where you are going to live, and start keeping a record of your and your children’s expenses,” says Crescent Law Chambers’ Nizam. “Speak to a lawyer to get a sense of the realities of divorce, and don’t just hope that the judge will rule in your favour.”

Tempting as it may be, parties getting divorced should avoid dissipating or squirrelling away funds away from the marital pool, or try to jack up monthly expenses.

“When divorce is imminent, parties may do ‘naughty’ things such as transferring large sums of monies from their joint/sole accounts to family members/third parties. They may start feeling generous and transfer their shares in properties or make large gifts of monies or assets to other relatives,” says Ivan.

“This is done with a view towards reducing the assets that they believe would be unfairly divided with their spouse, or sometimes out of spite towards their other half.”

But as Hui Qing points out, the court has the power to order disclosures, and funds that have been dissipated have to be accounted for.

“Let’s say in December 2022, your credit card bill was $2,000 a month. Why is it that after the marriage broke down, you are spending $17,000 on your credit card every month?” she says. “These are the things that will make you look bad, and then you have to defend it. By that time, the judge won’t have a good impression of you.”

Adds Ivan: “I once had a case where the wife donated a substantial sum of money to a charity after the marriage had broken down. She was expected to account for this sum, which formed part of her share of the matrimonial assets as awarded.”

For women who have substantial assets or expect to come into substantial assets during their marriage, they can consider drawing up a prenuptial agreement (prenup) to “ring fence” these assets from the pool of matrimonial assets to be divided in the event of a divorce.

While prenups are not binding, they are enforceable and given weight if a couple has lived out the prescribed intentions in the conduct of their financial affairs during the marriage, says Hui Qing.

“Say you receive $5 million as inheritance or as a gift from your grandmother, and you’ve agreed in your prenup that this is not to be divided in the event of a divorce – you have to make sure you keep it aside,” she explains. “Don’t mix it with your matrimonial funds. Don’t deposit it into, for example, a joint account with your spouse.”

Above all, don’t journey alone. Eliz recommends that people seek out support groups and private Facebook groups to hear from people who have journeyed on from divorce proceedings and made peace with it.

“Take time for self-care, and think of what will keep you balanced and healthy in the years ahead,” she says. “You don’t want to be stuck in a place of resentment.”

*Names have been changed