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In a divorce, what was once called "ours" gets divided into "his" and "hers." While you can easily make up your mind not to live together with your spouse, what happens to assets and wealth you both worked so hard to build?
If the divorce is happening by mutual consent, the problems of splitting in the assets in a manner fair to both parties can be resolved easily. However, if it isn't by mutual consent, the husband, who is usually the breadwinner in India society, can resort to concealing assets and income, so that the wife doesn't get her rightful share. Men usually do this by stashing cash in lockers, showing low income and high expenses and unloading property to family and friends with the understanding they will get it back after the divorce settlement is final.
Hence, it is important that women take professional help them navigate through such legal and financial details.
If the divorce is by mutual consent, things will sort out smoothly. However, if the woman is not satisfied with what her ex has given even in a mutual agreement, she can still go to court.
Estranged couple wouldn't have had to go through the rigmarole of battles in and out of court had they entered into a pre-nuptial agreement before getting married. This contract forces couples to have that all-important financial discussion before marriage. Here the 'would-be' partners sign, laying out terms and conditions for distribution of financial assets, maintenance and so on, in the event of a divorce.
This law is not mandatory in India as marriages here are not considered agreements and, according to one estimate, only 20 per cent of urban married couples have this agreement in place today.
Therefore, dividing the marital assets can be one of the most difficult tasks that divorcing couples face.
Stridhan
“On separation, the wife has right to 'Stridhan' and all jointly-held investments where she has made some monetary contributions. Unless the husband is ready to part willingly, she will not get share in any assets she has no hand in,” says Anshuman Jagtap, advocate at Hariani & Co.
Stridhan refers to the woman's personal wealth and encompasses all movable and immovable properties, gifts, and everything else received by her from her parents, relatives and and even from her in-laws at the time of her marriage. It can include things like cash, gift-items, jewellery, car, furniture and more. She also has a right on all gifts received after her marriage, for instance those given to her on festivals and other functions. Hence, it's important to maintain record of all such items/assets that she gets during or after the marriage.
If the husband refuses to part with items that come under 'Stridhan', she can back them up with relevant bills and receipts whenever needed. For this, it's important she makes a list of all her assets and gets it signed by two witnesses so that there is no room for it to be challenged later.
"If the husband still refuses, and it is proven beyond doubt that he is holding assets that legally belong to the wife, he is liable for criminal prosecution," says High Court Advocate Vikrant Deshpande
Hindu undivided family
“Currently, under Hindu Undivided Family, on separation the wife has no claim on the husband's ancestral property or inherited wealth which may include a house/vehicle, valuable collectibles, household items and so on,” adds Jagtap.
However, the Union Cabinet is likely to discuss an amendment to the marriage laws, which in the event of divorce would give wife an equal share in the property inherited by the husband. In case other family members also have right in that inherited property, but somehow find it practically difficult to divide it, then in this case the wife will be compensated with an equivalent amount of money instead of her share. If the proposed changes see light, the wife will also have right over the property acquired by the husband during or before the marriage.
Alimony/Maintenance
Besides jewellery and investments, upon which she has a right on anyway, she can also ask for alimony, also called as maintenance. Alimony can either taken as lump-sum which mostly doesn't exceed a third of the husband's estate or net-worth, or it can be a monthly payment to support the wife and children, if any.
“However, the amount approved by court will depend and differ depending on the couple and their financial position,” says Advocate Yogini Gurav. “There are chances that court may approve to give her higher alimony (maintenance), if she is unemployed or has the child's custody or is living on rent,” she adds.
Also, if the woman remarries, she loses the periodical alimony.
Since these are family matters, the court's judgement can vary depending on the case. For instance, recently a lady claimed alimony (on the ground of being unemployed), but her husband proved that she used to work earlier. She lost the case, as the court declared that she was capable of working to support herself.
Interim Maintenance
Divorce through mutual consent takes about six months to settle, whereas if it takes the court route it may take anything between 2-5 years depending on the case. Clearly, such a long period is difficult to sustain if the wife has no monetary backing. While the process is time consuming, they also have the option where they can claim for 'interim maintenance'.
It's the maintenance or finance she gets while undergoing a divorce or till the time a final verdict from the court is delivered. “This is easier for unemployed women to claim, whereas, the chances of an employed woman getting the same are only if her husband is very wealthy,” says Advocate Ajay Sethi.
Alimony or maintenance given depends on a lot of factors like husband's income, lifestyle and net worth. His liabilities such as any pending loans will also be taken factored in. Only after taking all these things into consideration will the court approve a sum that can be parted to the wife as alimony.
“If the divorce is because of domestic violence, then the wife can ask for alternate accommodation. If the husband is unable to give that, she can ask him to bear the rent,” adds Jagtap.
Property and Investments
If the house and investments are jointly held, where the wife has made no monetary contributions, then in all probability she cannot claim her right on those assets unless the husband is readily willing to share a part. However, if she has contributed equally or in some proportion, she can definitely claim her share and fight for it.
For instance, she will not have right on the house if it is in her name as well, but all the payments are made by the husband. However, she can claim her right on the house if she has made some monetary contributions for its acquisition.
"The wife will have to prove her share of contributions by submitting EMI payment receipts and bank payment statements and so on in the family court. In case the house is jointly held by both of them, the husband will either have to agree to sell the house and give her, her share. In case she doesn't wish to sell the house/property, he will have to buy her share out anf pay her," adds Deshpande.
Experts opine that jointly-held investments and accounts can be discontinued or stopped as per the couple's decision. The husband and the wife can decide to do this at their discretion. "If they both are ready to wait while their investments mature, they can decide to do so. In this case, if the investments are maturing after a period of time, (usually couple of years), then in this case, the court will give a common bank account which it will at the time the investments mature.
"In other words, when the investments are about to mature, the court will make sure that the maturity amount is put into this account and divided among the divorced couple in their respective ratios," adds Deshpande.
This rule can be applied to other investments like fixed deposits, National Saving Certificate, Public Provident Fund, Mutual Funds, investment-based insurance plans and so on.
