Divorce is the legal procedure that ends a marriage. Due to its impact on the lives of every person in the family, it is something that should be considered at last resort. By understanding the financial implications of a divorce, you will hopefully be better able to avoid getting entangled in financial hardship and allow both parties to move on with their lives.
To get a divorce, you will need to file for a divorce with the Family Justice Courts (for civil marriages) or the Syariah Court (for Muslim marriages) and comply with the legal requirements for divorce. This includes completing the Mandatory Parenting Programme before filing for a divorce. The Women’s Charter governs the law on divorce for civil marriages in Singapore, while the Administration of Muslim Law Act (AMLA) governs Muslim marriages.
#1 Legal Costs
One of the biggest financial outlays in a divorce are the legal fees. While it is theoretically possible to handle the divorce proceedings yourself without a lawyer, each couple’s situation is unique, and the complexities involved mean that you might need to hire a lawyer if you want things to proceed smoothly.
Legal costs can be broadly categorised into two kinds: 1) Professional charges, which are what lawyer charge (usually by the hour) for their legal expertise and representation; and 2) Disbursements, which are fees for filing divorce papers, court fees, commissioning fees, etc.
The legal fees for a divorce largely depend on whether the divorce is contested or uncontested.
An uncontested divorce occurs when a couple has come to an agreement on all issues relevant to their marriage and its dissolution. Both parties are also expected to have agreen on ancillary matters like as child custody and the division of assets before going before the court.
There are law firms that offer a fixed fee package for uncontested divorces that includes legal consultation and paperwork that needs to be filed.
This generally includes:
- Drafting and filing of the divorce papers
- Court Fees
- Bankruptcy searches
- Commissioner for Oaths
- Photocopying, postage and other miscellaneous items
- Interim Judgement
- Final Judgement
If you were not to take a fixed package, you would have to incur the individual cost of filing papers. However, there are also different combination of services included in these packages. For instance, the services required for divorce without any children, property or maintenance involved will be different from one where children, private property, CPF and maintenance is involved.
Alternatively, you could pay per hour to seek a lawyer but the costs of a fixed package may be lower. Typically, an uncontested divorce can take 4 to 5 months to be settled.
Costs: From $1,500 to $3,000 and above.
A contested divorce happens when your spouse does not agree to your terms involved in the divorce proceedings such as who gets custody of the children. Unlike an uncontested divorce, there are no fixed packages because the amount of work and the length of the proceedings depends on how long the other party would drag the proceedings for.
For such a divorce, you would be paying for your lawyer’s services by the hour. These fees can range from $100-$150 per hour for regular law firms and go up to as high as $350-$450 per hour for law firms with repute.
You can expect the costs in complicated cases where every line item from maintenance fees to dispersal of assets is contested to skyrocket, to the detriment of both parties.
Costs: $10,000-$30,000 and Above
# 2 Division of Assets
The division of matrimonial assets can be done by the court under the Section 112(10) of the Women’s Charter based on the following:
- Assets acquired by one or both parties during the marriage
- Assets used by one or both parties or their children for various purposes
- Assets acquired before the marriage but substantially improved in quality during the marriage
Assets which are excluded from the definition of matrimonial assets are:
- Assets received as gifts or inheritance
- Gifts or inheritance that has not been substantially improved during the marriage
Matrimonial assets include the HDB jointly bought, joint investments, and other big ticket items acquired jointly.
It is a misconception that assets will be divided equally between both parties. The court would adopt a structured approach when dividing the matrimonial assets. This is done by taking into account the contribution (monetary and non-monetary, such as doing household chores) of both parties.
The court may also make further adjustments to this ratio at the court’s discretion. Factors that the court takes into consideration is whether there has been dishonest concealment of matrimonial assets or attempts to exaggerate hardship.
# 3 Children And Spousal Maintenance Fees
One of the most important rulings the court will make is which parent gets custody, and therefore responsibility for the care of the child or children. Once that is determined, the court may order either or both of the parents to pay maintenance for the child. Under the law, a child must be maintained until they turn 21 years old.
Factors that affect the ruling of how much maintenance should be contributed to the child include each parent’s financial capabilities, the environment the child was brought up in, as well as the educational needs of the child.
Like the maintenance fees of children, spousal maintenance for the ex-wife is not clear cut as well. Factors that determine the amount of spousal maintenance include the length of the marriage, and financial resources of each party.
During this trying period, social service organisations will render assistance like providing cash or food vouchers to take care of the family’s welfare.
# 4 Other Considerations
When a marriage ends, housing can be one of the most challenging transitions to work through. A divorcing couple may decide to live separately or they may continue to live in the same house to save costs. A key consideration is to have stable accommodation for the divorcing couple and their children so that routine activities can continue.
In addition to your basic financial needs, you should consider what you would need for a more secure financial future for you and your children. This may include cancelling joint accounts, opening new individual accounts, and updating insurance and CPF nominations, wills, and investments, etc.
Divorce has numerous negative effects on affected couples, their children, and their extended families. But if it is to be pursued, then being prepared financially will help everyone through this unpleasant chapter of life and open a new one.