It is no news that divorce can cause a lot of emotional turmoil for most individuals. And unfortunately, no matter how prepared you are for it, the reality of several factors may hit hard on all parties involved. Especially the financial aspect of divorce, with having to consider asset division, maintenance, and tax implications. However, if equipped with some basic knowledge of divorce’s financial realities, you can be empowered to budget and plan accordingly. With that, this article will delve into the complexities of financial matters in divorce to better prepare yourself for what is ahead. Whether you are currently facing financial strain in your relationship or want valuable insights and perspectives, you can use this guide to plan the best course of action for your journey.

Dividing the Spoils: Matrimonial Assets and Liabilities:

The division of matrimonial assets during divorce is a contentious issue in Singapore, potentially affecting one’s standard of living in the long run.

Matrimonial assets include:

• Marriage Assets Overview
•  Acquired by both parties during marriage
• Used by both parties and children
• Assets acquired before marriage but significantly improved during marriage.

Matrimonial assets include family cars, homes, savings, CPF accounts, businesses, inheritances, and jewelry. While many believe a 50-50 split is the norm, this is unlikely due to the complexity of these assets.

Here are some of the many factors for the court to consider:

• Financial Contributions and Family Welfare
•  Financial contributions from each party to assets
• Non-financial contributions for family welfare, including caregiving duties and career sacrifices
• Needs of children
• Pre- and post-nuptial agreements on asset division
• Marriage length
• Debt owed by each party
• Individual financial circumstances of each party.

The decision to protect assets in matrimonial situations is based on individual circumstances and should be made on a case-by-case basis. It is advisable to monitor major matrimonial assets and your contributions to them, such as paying for preschool fees, by producing bank statements of monthly deductions from your account.

Navigating Support: Spousal Maintenance and Child Support

In Singapore, the Women’s Charter grants maintenance rights to both spouses and husbands who cannot support themselves due to disabilities. Courts determine the need for maintenance and the appropriate amount, with potential disputes stemming from reasonable expenses. Child maintenance is also a legal duty for parents until age 21, and can be applied from spouses if they are legal guardians or have custody of the child. However, there is no set formula for determining the amount of spousal or child maintenance.

Some factors that the court will consider, include:

• The salary and earning potential of each party in the past, present and future
• The financial needs and obligations of each party/child in the future
• The standard of living of each party before the marriage broke down
• Any direct and indirect contributions made by each party to the household
• The length of the marriage

To secure spousal maintenance, it is crucial to request a nominal fee, allowing for future increases if necessary. If the judge does not grant maintenance, there is no possibility of obtaining it. Divorce can be a necessary evil if the marriage cannot be saved, as it can cause significant financial impact. To avoid prolonging the emotional and financial pain of a divorce, it is better to end it amicably rather than dragging it out. Understanding the financial impact of a divorce can help make the right decisions, accelerating the process and reducing the emotional and financial pain for all involved parties.

Finding Your Footing: Moving Forward Financially

Financial planning is crucial after a divorce, as it helps maintain quality of life even if the financial nest egg decreases. Develop a plan and budget for the years and decades ahead to ensure your finances are in good shape. Divorce attorneys can provide advice on managing finances after divorce, and it is essential to consult with both a divorce attorney and a financial advisor to ensure you move forward with your new financial plan in confidence.

Social Security for Divorced Spouses

Divorce can complicate Social Security after a divorce, but a financial advisor can help understand the nuances and help factor in the impact of the divorce on Social Security payments and retirement. It’s common to believe that you are ineligible for Social Security spousal benefits after a divorce, but if you divorced after a long marriage and earned significantly less income, you may be entitled to benefits based on the higher-earning spouse’s income. Social Security rules are complex, so it’s essential to work with a qualified financial advisor to determine eligibility. Adjustments may be necessary if your original retirement plan included part of your spouse’s Social Security payments. Consult with your financial advisor or investment advisor to reallocate your savings and investments accordingly, and you may still be able to retire at the age you initially targeted.

Health Insurance After Divorce: Your Options

After a divorce, you may retain health insurance through your spouse’s plan for a short period. Check your health insurance paperwork and consult with your representative to determine the coverage duration. If you cannot afford insurance, research Medicare or Medicaid eligibility. If your income is above the Medicaid eligibility threshold, you may need to decide between paying for a private health insurance policy or moving forward without health insurance. Your divorce attorney should address health insurance issues before finalizing the divorce. If you have been a homemaker, work in a job without health insurance, or lack health insurance, consult with your attorney before finalizing the divorce settlement agreement. It is possible to write health insurance coverage into a divorce settlement agreement.

How To Revise Your Estate Plan Post-Divorce

After divorce, it’s crucial to revise your estate plan and amend your existing will. Failure to follow legal requirements can trigger the probate process, causing frustration for heirs and potentially causing family disunity. State laws often require the creator to sign their name in front of a notary and two witnesses. Consult with your financial advisor and estate planning attorney to review the details of your will and estate plan. Failure to address the language of your will could result in assets being bequeathed to your former spouse, transferring the proceeds of your hard work to the individual you no longer love. Take time to identify new beneficiaries in your will and adjust other estate planning documents accordingly. It’s important to note that you might not be able to officially remove your spouse from your will until after the divorce is complete.

Filing Taxes After Divorce

After divorce, your tax situation may change, but you don’t have to navigate it alone. A tax advisor, accountant, and financial planner can help you determine your new tax bracket, plan for year-end taxes as a single filer, and set the stage for financial prosperity.

Navigate Through Your Divorce The Best Way Financially with Yeolaw

No couple plans for a divorce but life is often more complicated, and circumstances can change along the way. In such situations, recognizing the need to revise your finances as a single parent is just one of the first steps. At Yeolaw, our team of professionals can help relieve some of that burden, affording you some additional peace of mind during a tumultuous time. It is important to remember that the end of a marriage also marks a new chapter in life and every new chapter comes with its own set of financial responsibilities. Schedule a free consultation with us today to begin your journey through divorce the best way financially possible.

Divorce in Singapore can be a complex process because of its emotional upheaval that often overshadows legal realities. With that, understanding each step of the divorce process is not only crucial for the individuals involved but also to make informed decisions that protect their interests and the children involved, if any. In this article, we will explore the 5 grounds for divorce on how separating couples can navigate through these procedures in Singapore, making a complex process more approachable and manageable. 

Let Yeolaw Guide You Through Your Divorce 

Embarking on the journey of divorce in Singapore can seem daunting due to its intricate legal procedures and emotional complexities. With clear insights and a skilled divorce lawyer’s support, the process becomes easier to navigate. Yeolaw’s seasoned divorce attorneys are ready to help and advocate for your needs during challenging times. Schedule a free consultation today.