Men, here’s how you can protect your financial interests in a divorce
When a couple ties the knot, their foremost thoughts are about living together, enjoying each other’s companionship, and possibly, starting a family. Divorce is a subject that newlyweds rarely think about.
But the hard reality is that living together is very different from the courtship period and that a certain percentage of marriages don’t survive.
A break-up can have many negative consequences. Your emotional well-being will be in tatters and most people take many months to get over the trauma of a separation.
In our earlier articles, we talked about prenuptial agreements and specifically discussed how women could protect their financial interests in the case of a divorce.
But, a divorce can have particularly adverse financial implications for men. The husband would usually be required to pay maintenance to his wife. It is also possible that the Courts will order that a certain portion of the husband’s wealth and property be given to his spouse.
Is there any way that a man can protect his financial interests in a divorce? What are the steps that you can take prior to your wedding to ensure that a legal separation does not result in a large part of your savings being taken away from you?
Enter into a prenuptial agreement
Marriages should be about love, positivity, and a mutual promise to share the ups and downs of life. Signing a prenup can dampen the enthusiasm of the soon-to-be married couple.
It is important to remember that the party with more to lose will usually be the one to propose that a prenuptial agreement is signed. The person who initiates the subject of the prenup runs the risk of alienating the other partner even before the marriage has been held.
But, if you think that a prenup will not really affect your relationship, it could be a good idea to enter into one.
Bear in mind that Singapore’s laws do not consider a prenuptial agreement to be the final word on how various aspects of a divorce will be handled. However, a prenup could help to establish to the Court, the views that the parties held before they got married.
How a prenup can help
If a man owns property that has been in his family for many years, a prenup could help to keep it separate from the assets that will be divided between the couple at the time of their divorce. A prenuptial agreement could also lay down the maintenance that would be paid by the husband.
When deciding whether the terms of a prenup will be enforced, the Court will take several factors into consideration. One of these would be whether the agreement is fair to both parties. A one-sided document is likely to carry less weight.
Some precautions that you can take
Any property or investment that is purchased from money earned after a marriage takes place could be considered a “matrimonial asset” and be subject to division between the divorced husband and wife. If the husband has a far greater salary than his wife, the percentage of ownership of the assets may not be affected.
Why is this? At the time of a divorce, the Court will take the contribution that the couple has been making to the marriage into account.
For instance, the husband may be earning a high salary, but his wife could be doing most of the housework and looking after the children. This could tilt the division of matrimonial assets in her favour even if they were not bought with money that she had earned.
But it is possible to keep property and assets out of the matrimonial pool. You could do this by clearly establishing that they were acquired before your marriage, and the earnings after marriage were not used to maintain or upgrade these assets.
The earnings from these properties should go into a separate bank account. Neither the bank account, nor the property should be held jointly by the husband and wife. All these precautions could help to convince the Court to treat these assets as belonging solely to the husband.
Review your will and the nominations that you have made
Your will can specify the persons to whom you want to leave your assets to. At the time of your marriage, you may want to alter your will. Similarly, when you are getting divorced, you may want to make some changes.
You may also want to update the nominations that you have made in your insurance policies. A divorce may also be a reason to change your CPF nomination.
What will happen to your inheritance?
The Court has the power to order the division of the matrimonial assets between the estranged husband and wife. What exactly is a matrimonial asset?
Section 112 of the Women’s Charter says that a matrimonial asset includes:
- Any asset, even if it is acquired before the marriage. But this asset should have been used by both the husband and wife, or their children, after the marriage.
- Any asset that has been substantially improved after the marriage.
But the statute goes on to say that matrimonial assets do not include an inheritance as long as it has not been improved after marriage. Hence, if you are staying in an inherited home after your marriage, it will probably be considered to be a matrimonial asset. However, if you have an inherited property that is kept separate from your other assets, the Court could take a view that it belongs solely to you.
Put in place safeguards to prevent an acrimonious divorce
A divorce is never pleasant. If both parties decide to contest various issues, the legal proceedings can become lengthy and bitter. In most instances, disagreements arise regarding children, maintenance, and property matters.
The Family Justice Courts in Singapore usually favour the wife and try to ensure that her financial interests, as well as those of the children, are adequately protected. Because of this, it is a good idea to try to arrange matters so that there is as limited scope for disagreement as possible.
A good way to do this is to enter into a prenup and also to take other precautions that will help to establish which assets and property do not form part of the matrimonial pool.
Disclaimer: The author is not a licensed law practitioner in Singapore. This article is based on the author's personal research and understanding into the topic, and does not constitute legal advice.