What is a Matrimonial Asset?

What is a Matrimonial Asset?

In a divorce, when does an asset become a matrimonial asset?

People going through a divorce often wonder, “what happens to an asset I acquired before I got married? Is that now a matrimonial asset that my spouse can make a claim for?”

To answer this, we need to look at the Women’s Charter, which defines what a ‘matrimonial asset’ is, in section 112(10):

  • “A matrimonial asset is any asset acquired before marriage by one or both parties to that marriage, which is:
  • Ordinarily used or enjoyed by both parties, or one or more of their children, while the parties live together for the purposes of household, shelter, transportation, recreation, aesthetic or social purposes; or
  • Substantially improved in the course of the marriage by the other party, or both parties;
  • Or another asset of any nature which one or both parties acquired during the marriage.
  • But doesn’t include any asset (which is not a matrimonial home) that one party acquired at any time, by way of gift or inheritance, that has not been substantially improved through the marriage by the other or both parties.”

So under the Women’s Charter, an asset one party acquired prior to the marriage does indeed become a matrimonial asset as long it was used or enjoyed by one or both spouses or their children, while they lived together, OR as long as it was substantially improved during the marriage by either or both of them.

In caselaw from some years ago, the courts have ruled that if parties no longer live in a property, it ceases to be a matrimonial asset (see cases such as BGT v BGU [2013] SGHC 50).

The Court of Appeal was recently asked to consider this scenario again in the case of TND v TNC [2017] SGCA 34. Here, the wife had claimed that the law could be interpreted to mean that once an asset has become a matrimonial asset, it remains as such, according to the meaning of section 112(10)(a)(i) of the Women’s Charter. The husband argued that, as the family had only lived there for 15 months, the property was not an asset of the marriage as they had only lived there for a total of 15 months.

The court had to evaluate whether the asset, acquired before marriage, and “ordinarily used or enjoyed” during the marriage for the purposes listed in section 112(10) even though only for a short time, was still a matrimonial asset when the marriage ends, some years later. In that case, the court took the wife’s view, that the property was indeed a matrimonial asset, and was thus able to be claimed by the wife.

What does this case mean for you?

  1. Properties which the parties treated as a marital home for a long time, but that they don’t currently live in at the time of divorce, are covered by section 112(10)(a)(i), as are the parties’ last place of residence before divorce, which they used as a marital home.
  2. Say, for instance, that a married couple live for 25 years in a property they bought before marrying, which they use as their marital home. Their adult children leave home, and the married couple move to a small apartment, also acquired pre-marriage. A couple of years later they divorce. In this case, both the last place of residence (the apartment) and the first property they lived in are treated as marital property by the Women’s Charter. Just because the parties no longer live there, it doesn’t mean that the house they were in for 25 years as the cradle of their family life should not be treated as a matrimonial asset.
  3. The court will make their decision based on the facts and circumstances of the case that are presented to them.
  4. Though the courts have said that an asset can remain a matrimonial asset even when the parties don’t live in it, that in itself doesn’t always mean that such a property has to be divided exactly as other assets acquired whilst married are. Courts having to decide about matrimonial assets under section 112(1) have the discretion to divide them according to however they see it most equitable to do so. They’ll bear in mind the nature of the asset, the length of time the parties ordinarily used or enjoyed it, and it was paid for (in other words, whether it was partially paid for during the course of the marriage).

In the case of TND v TNC [2017] SGCA 34, although the court said the property was a matrimonial home because the family had lived there, as it was only used for just over a year, the husband was entitled to a higher share, as he had made higher direct contributions.

Conclusion – at what point should matrimonial assets be valued?

Parties divorcing will want to know what is the operative date to be used to determine the asset pool and value those assets? This is a key question for three main reasons:

  1. The spouses may have already separated, prior to the divorce proceedings, and no longer intend to jointly accumulate matrimonial assets.
  2. There are 2 stages to divorcing in Singapore: to end the marriage, parties first must obtain an Interim Judgement, and then the court will hear and rule on ancillary issues such as how to divide assets.
  3. In general, it takes about a year to finish a divorce in Singapore. It usually ends when the court concludes the ancillary matter hearing.

Of course, while the divorce process progresses, the asset’s value might fluctuate. Another possibility is that assets may increase or decrease in value due to the stock market, or bonuses awarded, or the crystallisation of share options.

This is why the most important question for many people is: what is the cut-off date at which the assets in the asset pool should be determined and valued?

There are four possible answers to when this date should be:

  • The date of separation
  • The date they file for divorce
  • The date the obtain Interim Judgement
  • The date the ancillary matters hearing is held.

In the case referred to above of TND v TNC, the Court of Appeal stated that “the ancillary matter hearing date is the one that must be used when valuing the matrimonial assets”.

Therefore, unless parties can persuade the court that a different date should be used, then all marital assets will be valued at the very end of the divorce process – when the ancillary matters hearing occurs. This is important for family litigants to bear in mind.

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