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How to deal with the financial impact of a divorce
When Nitu and Mihir Saxena filed for their divorce, the first thing they were advised was to hire separate chartered accountants (CAs).
The basic idea was to create papers, including liabilities and net-worth for two different individuals.
And, break away from the mould of joint property, bank accounts, etc - a typical situation in most Indian marriages.
Divorce lawyer Mrunalini Deshmukh explains the need, "It would be practical to maintain a clear division of assets right from the start. But nobody marries with an intention to divorce. So, sorting out finances becomes a major issue."
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How to deal with the financial impact of a divorce
Entitlements
Under the Hindu Marriage Act, the court considers the status of both the parties, separately.
In case one of the two does not have any personal income, or there is a huge disparity between their incomes, he/she would be entitled to maintenance from the post-tax income of the earning spouse.
The caveat
The individual with no income is not entitled the spouse's parental assets or income, unless the family's income is part of his/her spouse's income.
Also, expenses on club membership and expensive cars cannot be shown as a drain on one's annual income and hence, pay a lower maintenance.
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How to deal with the financial impact of a divorce
Typically, the court tries to distribute alimony, so that one can maintain the lifestyle they once enjoyed, even after marriage.
But additional alimony cannot be claimed to maintain the same lifestyle, if it has been a result of perks due to the spouse's employment.
In case of a working woman, her entitlement would depend on her individual source of income and other assets.
She would also be entitled to The 'Streedhan' or gifts given to her during the marriage period. It would include jewellery, and the heirloom belonging to her husband's family that had been gifted to her.
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How to deal with the financial impact of a divorce
She would also be entitled to The 'Streedhan' or gifts given to her during the marriage period. It would include jewellery, and the heirloom belonging to her husband's family that had been gifted to her.
"Anything given for her usage is her 'Streedhan'. So, if her father had gifted cash to the son-in-law during the marriage to buy a car, she can take it with her when she divorces, since it was meant for her use," says Delhi-based divorce lawyer Attin Rastogi.
Other Acts such as the Muslim Marriage Act, the Special Marriage Act, etc, do not provide for alimony or maintenance for the husband.
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How to deal with the financial impact of a divorce
Joint assets
Their existence does not necessarily mean that there will be a 50:50 distribution between the couple.
For instance, if a house is purchased on loan after marriage, the spouse paying the equated monthly instalment will be allowed to retain it.
This is possible even if the flat is registered in the other spouse's name. "The courts understand that most couples register the spouse as joint owners or sole owner more as a matter of convenience," adds Deshmukh.
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How to deal with the financial impact of a divorce
Children
The custody of the child can be decided mutually by the parents or by the court, if contested.
In such cases, the funds required for child support will also be decided by the court.
While both children (girl and boy) need to be supported until they turn 18, the girl child could ask for a financial support for her marriage.
When both parents are working, they have to contribute equally for the child's support.
