Financial settlement during the divorce

Financial settlement during the divorce

A marriage is a union of two people for the rest of their lives. However, it may jeopardise when a couple decides to call it quits. Though the emotional loss is something one can live with, the reality of financial loss after being alone is something one lives with forever.

Sometime back we were approached by a lady. Her husband had left her and their only son in the United Kingdom. He later came back to India and remarried.

The lady sought financial settlement advice. We represented her in the financial settlement during the divorce proceedings. We obtained all the details of husband’s Indian properties and made a report which was accepted in the UK court.

The report included original property papers from the revenue authorities and a calculated share of each owner. We also translated the documents to English from the vernacular language as it is necessary in case the records are not in the official language.

The wife and son later got 50% share in all the properties belonging to her husband.

Following are a few things to ask yourself before reaching a smart divorce settlement:-

Where are your Financial Records?

After a divorce, in most cases, the wife is financially naive and therefore gets a raw deal. In a marriage, the husband often takes care of household financial matters, even if the wife is also earning. Thus both the partners must keep accurate financial records, clear titles of all the high-value items in the house. They should credit their salaries/ income into a joint account to run household expenses and also discuss and distribute their finances and financial responsibilities equally from the beginning of their marriage.

What’s your level of awareness?

No single secular law governs marriages in India. There are separate community laws for marriage, and divorce is governed by the particular law under which the union had been registered. However, all the personal laws are superseded in the cases of marriages registered under Special Marriages Act.

Are you practical enough?

No matter how beautiful a relationship was when it ends it ends a mess. Therefore, money matters should be at the centre of the whole process if one wants to get a fair settlement out of a broken marriage. Experts say that one should think financially and act legally to get a fair deal. The best idea is to take the whole process as a business deal, where two partners are going their separate ways.

Do you know your share?

To secure a fair deal at the end of a relationship one must have a bright idea about his/her share before going for a claim in the courtroom. The Indian law does not recognize anything as marital property. A woman can only claim for all the gifts, including land, property, jewellery, and appliances, gifted by her parents or in-laws at and during the time of marriage.

Where are all records and their copies maintained?

One must have the proofs ready as certificates, and other investment details are useful during the divorce case. The documents include:

  • Marriage certificates
  • Tax returns and salary slips for both spouses
  • Bank and credit card details
  • Mutual Funds, Stock and bonds details
  • Powers of attorney Document
  • All big-ticket purchases records
  • Insurance policies copy if any
  • Outstanding debts, home, car and credit card loans documents.

Finally? Do you know that professional help can make a difference?

Always go for a lawyer for the legal aspects and a financial planner to take care of your money matters. A professional can always get you a better a deal as he/she knows the nitty gritty of the legal aspects. Do consult with the lawyer and financial planner before taking any step of any sort.

Don’t Worry Honey, Divorcees Get Money


Under the Indian law, alimony is the monetary compensation granted to the spouse who is unable to support himself/herself, by the other spouse, during or after the divorce proceedings. When this sum is given during the court proceedings, it is the maintenance amount, and the same term is used in the various statutes such as the Hindu Marriage Act, 1955. After separation the alimony may be taken as a lump-sump or a fixed payment which maybe given monthly, quarterly etc. Civil law such as The Special Marriage Act 1954 and Section 125 Code of Criminal Procedure are the common laws for all, however, The Indian Christian Marriage Act, 1872 and the Indian Divorce Act are applicable to Christians; Shariat Law and Dissolution of Muslim Marriages Act, 1939 and the Muslim Women (Protection of Rights of Divorce) Act, 1986 apply to Muslims and for Parsis, there is a separate marriage and divorce act.

Maintenance is granted only if an application is filed before it, by a man or a woman, and further the discretion lies with it to investigate and decide whether alimony is to be awarded or not. There are various factors that affect the amount of alimony, such as:

  1. The income of the wife if she is earning, will cause a reduction or increase in the maintenance granted by the court.
  2. The living standard of the wife/husband if they are not earning.
  3. If the wife remarries, the husband need not pay any maintenance after that.
  4. If husband is disabled and cannot earn, wife is asked to pay alimony.
  5. The longer the marriage, or the greater number of children and emotional investment, the larger the sum is expected to be.
  6. A spouses’ actions during marriage, such as, adultery, harassment of the other spouse etc affect the amount as well.

Mentioned above are only a few dimensions that are looked into and apart from these, the court sets other tests for amount assumption.

This mandate of the court is subject to change, and so, the amount decided need not be fixed per se. For example, if the husband finds a source of income and the wife is still asked to pay alimony to him, it would be unfair for her. Furthermore, the court also takes into consideration a lawful marriage, and no mistress of unlawful second wife can claim alimony, although children from the second marriage can claim child support.

All maintenance paid is taxable amount and so spouses usually, while paying alimony, deduct this tax amount from the sum that is to be paid to the other spouse as per court order. Further, the amount usually never goes beyond 1/5th of the husband’s income, although in a landmark case in April 2017, the Apex Court ordered a Bengal resident to pay 25% of his salary as ‘just and proper’ maintenance, that will ensure that his wife could lead a dignified life after separating from her husband.

Divorce Might be More Expensive Than Marriage!

property settlement

With the pain of separation and divorce, comes the harsh reality of sitting across the table and settling asset distribution too. Divorce cases could be resolved with the mutual consent or contested in court – in both the cases; there is a need for clarity about the ownership of assets. It is only with this clarity that division of all assets can be done in a fair manner.

Some specialized legal experts handle the intricacies of divorce. We step in when it comes to evaluation of property and assessment for the purpose of settlement in such cases. Take the story of Ritika Saluja, who approached us after she viewed the history and service details of the company on the internet. She had been living in Sydney, Australia for the past twenty years after her marriage to Sachin Saluja. In addition to struggling with her divorce and other issues of separation, she also found herself in a fix over the property that her husband had in India. As expected, he was not very forthcoming in providing details of the same. She had no clue whatsoever about the value of these properties – neither Indian nor Foreign. Once she contacted our office, an extensive online interaction was done with her to obtain the exact details of her case. Subsequently, follow-up through emails and talks helped her stay in tune with all the efforts being done to pursue her particular case. To save her from the financial crunch that she feared and to help her get her rightful share, the company legal experts diligently resolved the issues without her having to travel to India even once for any query or filing.

For NRIs, it is a humungous task getting an asset evaluated in India – and preparing a report for legal purposes is a greater challenge. They cannot even travel frequently to India to take care of their property matters. While the divorce issues could be taken care of lawyers who specialize in separation cases, expert advice is needed for the asset division settlements. However, frequently during a divorce, the two parties might not be aware of the property of the other. This leads to a loss of direction. In India, the notion of marital property rights has not received as much attention as in some other countries. In the largely patriarchal society that India has, it is accepted that a woman ‘belongs’ to her husband’s family after her marriage. Her right to property has not been recognized in society. In fact, the Indian community still reflects a relatively insecure financial status for women. Usually, they do not have clarity about the level and nature of investments done by their husbands. Hence, over the years, divorce laws have been framed to favour women so that they are protected financially. We could define Property in various ways – share in business, dowry that the woman brought with her, gifts that she received whether in her marriage or later on from friends and relatives and various other assets collected by the couple.

In a divorce case either the man or woman will approach the court to settle matters of division and settlement of property. This division is required either for themselves or, for their children. The only property considered here is of course just the ‘marital property.’ Also, it is vital to reflect income disparity during the division of assets. We could very well ask ourselves – who would want to talk about assets and their details when love & marriage are the only things in mind? But in reality, it does help being aware of each other’s assets during the marriage. It is also important to be alert and aware of the joint/individual assets bought during the marriage. Let not divorce become a mentally and financially more expensive option – stay alert, stay secure!