Matrimonial Assets: What happens to your assets in Civil Law Divorce?

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In a divorce case, will both spouses receive an equal share of the matrimonial assets? Read on to find out.Matrimonial Assets: What happens to your assets in civil law divorce

The complexities that ensue a divorce more often than not involve the division of matrimonial assets. While divorce procedures for Muslim couples are governed by Islamic family laws [1], civil law divorce is governed under the Law Reform (Marriage and Divorce) Act 1976 (“the Act”). Division of matrimonial assets in a civil law divorce is also governed under the Act.

So what happens when a couple decidedly part ways due to an irretrievable breakdown of marriage? Will the matrimonial assets be split equally among them?

Let us give you a brief overview on the division of assets in a civil law divorce.

What are Matrimonial Assets?

Matrimonial assets includes all the movable and immovable properties acquired by the couple during their marriage through joint efforts for the purpose of continuing resources for the spouse or their children or the family as a whole.

The following are some examples that constitute matrimonial assets:

  1. Matrimonial home;
  2. Other immovable properties acquired during marriage;
  3. Tangible properties such as cars, jewellery, furniture and other valuables;
  4. Intangible properties such as monies, shares and equities, investment funds, employment provident fund (EPF) fund, and etc; and
  5. Gifts, especially those of substantive value, from husband to wife and vice versa.

In addition to that, matrimonial assets can also include assets that are owned by a single party before or during the marriage [2] but was subsequently improved by both parties individually or jointly [3]. For example, a house that is owned by either the husband or the wife before marriage can be considered a matrimonial asset if it was subsequently renovated or improved upon by both the husband and wife or the either party individually.

How are Matrimonial Assets Divided?

There are two types of divorce under the Act, namely a single petition and a joint petition. In a single petition, both spouses are not able to reach a consensus on the divorce, whilst in a joint petition, both spouses can mutually agree to the dissolution of their marriage.

Joint petitions [4] go through an uncontested proceeding in court, and the division of matrimonial assets is most likely to accord with what has been mutually agreed upon between the spouses.

However, in single petitions[5]/contested proceedings, the court may exercise a wider discretion in the division of property as it sees fit. Following the divorce petition by either one of the spouses, a hearing date will be set for the court to decide on matrimonial issues. Thereafter, the court will have the discretion to grant a decree of divorce or judicial separation, and to order the division of the matrimonial assets accordingly[6].

Factors Considered in Asset Division

For matrimonial assets, the court is always inclined towards equal division, subject to the three factors below [7]:

  1. Extent of contribution made by each spouse towards acquiring the matrimonial assets;
  2. Debts owing by either spouse arising from a contractual obligation for their joint benefit; and
  3. Needs of minor children arising from the marriage.

For non-matrimonial assets, i.e. assets acquired before marriage by either one of the spouses [8] or assets acquired through the sole effort of one spouse [9], the court will generally grant greater portion to the spouse who acquired those assets, subject to the two factors below [10]:

  1. Extent of contribution from the spouse who did not acquire the assets, such as looking after the family or caring after them; and
  2. Needs of minor children arising from the marriage.

What about the EPF?

Even though EPF may be considered a matrimonial asset, a spouse’s EPF will generally not be equally divided. The recent Court of Appeal case of Yap Yen Piow v Hee Wee Eng [11] held that the court is not obliged to divide the EPF money at all but is giving the wife 25% of the husband’s EPF sum based on equitable grounds considering her indirect contribution towards the wellbeing of the family and hence the husband’s EPF.

Despite having said so, the case of Koay Cheng Eng v Linda Herawati Santoso [12] held for the husband’s EPF funds to be equally divided between the spouses. The court was of the view that it was only just and equitable to do so as the wife entered into the marriage with the intention of growing old with the husband, and the EPF was intended to be used by the both of them in their old age.

Where does the law stand?

Although there are legislative guidelines as to how matrimonial assets are to be distributed, the courts retains the discretion to distribute matrimonial assets based on the facts and scenarios presented before them.

Each divorce case is unique and the facts differs from one married couple to the other. Therefore, the distribution of matrimonial assets varies on a case to case basis and there is no guarantee that both spouses will receive equal distribution of the same.

[1] Islamic Family Law (Federal Territory) Act 1984, various state Islamic laws
[2] Phua Beng Hong v Ho Shik Ho [2002] 2 MLJ 289
[3] Section 76 (5), Law Reform (Marriage and Divorce Act) 1976
[4] Section 52, Ibid
[5] Section 53, Ibid
[6] Section 76 (1), Ibid
[7] Section 76 (2), Ibid
[8] Section 76 (5), Ibid
[9] Section 76 (3), Law Reform (Marriage and Divorce Act) 1976
[10] Section 76 (4), Ibid
[11] [2017] 1 MLJ 17
[12] [2004] 6 MLJ 395

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