Division of assets through Divorce: Is the issue treated fairly by the Divorce Law?
________________________________________________________________________________
This Blog is written by Promita Ghosh from ICFAI University, Dehradun (Department of law). Edited by Oshin Suryawanshi.
________________________________________________________________________________
The legal process connected in what way assets are split upon divorce is a mindful and complicated activity. It became a vigorously disputed matter as the court has a broad disposition in determining who receives what. Equitable distribution thus fair division of property lay the hand of a lot of factors while the distribution of property which incorporate the requirement of the couple, how long-lasting they were married, the monetary contribution of the spouse during their marriage. Factors that make the holding of property genetically dissimilar are how much the individual spouse gross and payout, their age, academic attainment, health, employment of the party, and even includes unfaithful and offensive.
HOW ARE ASSETS AND DEBTS DIVIDED AT DIVORCE?
A divorcing couple themselves divides their property and it is very common for the couple to deal with the assets without any third-party involvement thus, leaving it to the court.[[i]] But if the couple failed to do so then the court will take the case and put state laws to solve the problem between the couple.
Property has been divided into two general schemes:
(1) Community Property – In this, the spouses are considered to fairly own each, and every income and asset obtained and earned throughout the marriage. both the parties adjudge to fairly possess total money received by any of the parties during their marriage. doesn’t matter if only the sole partner is employed. During a divorce, community property is basically split between the couple, while each partner holds on to separate assets.[[ii]] In addition, all property received throughout the marriage with “community” money is possessed justly by wife and husband, nevertheless of who borrowed it. This community property is observed in some states like California, New Mexico, Washington, Alaska, etc.
(2) Equitable Distribution – In this, the property obtained throughout the marriage is owned by the spouse who makes it. In the situation of divorce, the property will be split up between the parties in an unbiased and just manner. There is no proper rule in deciding who gets what or how much. Different factors are kept in mind by the court and think about a variety of details as well. The court may possibly give each party a proportion of the overall worth of the assets. In this, each couple will get individualized property, assets, and debts whose value sum up to a set-aside proportion. But this thing must keep in mind that it’s unlawful for either of the party to put out of sight the assets in order to target them from property splitting, and if anything, unlawful is done by any of the spouses, the court could punish with penalizing and in some states, by giving a proportion of the worth of the hidden asset to the partner.
Splitting of property does not automatically mean a physical splitting. But the court may give a proportion of the total worth of the property to both the couple. Each one of them will receive debts, individual property, and assets whose values sum up to both the party’s proportions.
The above property-divided models have their individual set of pros and cons.
If the couple can decide how to distribute their property and debts then no third-party involvement is required and if they can’t decide then it heads to court and judges determine the division of the property.
If the registration of the property is in the title of husband then he is the owner of the assets further if her wife has any contribution in getting a hold on then she has to prove that in the court and vice-versa. And if the property is registered in both the party’s name then the distribution will be based on the contribution they made. And if the property is bought on loan, then both parties have to distribute their liabilities.
Section 27 of Hindu Marriage Act, 1955
If after the divorce between the couple the Hindu married couple faces any problem regarding the division of the property among themselves due to the absence of feasible agreement, the court takes the case and allocates according to Section 27 of the Hindu Marriage Act, 1955. The court needs to resolve this in a fair and equitable manner.
Property purchased by the husband after the marriage in the title of the wife comes under the scope of section 27 of the Hindu Marriage act. And the adequate court has the power to split the matrimonial property in a fair and just manner between the parties.
In Surinder Kaur v. Madan Gopal Singh, the honorable court during demonstrating the point of section 27 clear up that the property which gives up to any of the partners at the time of the marriage is not sufficient it also includes any time before or after the marriage.
CONUNDRUM OF BENAMI TRANSACTION
The property is bought in the name of another party thus, his/her spouse then comes under the Benami transaction. This Benami transaction is governed by the prohibition of Benami Property Transaction Act, 1988.
Under Section 4 of the Prohibition of Benami Property Transaction Act,1988 clearly forbid the right to recuperate a property held Benami hence, if the husband purchases a property in the name of his wife, in that case, the husband will not be permitted to ask tag over the property as it is examined as Benami transaction.
Still in this case Section 4 of the act will not be applicable, if the husband can show that the compensation reward for buying the property in the title of his wife was rewarded by the husband from the known origin of the mate, the dispute can reinforce under Section 2(9) A (iii) of the act, which accurately outline in such a way that if the one party’s property is considered in the title of his partner and the deliberation for the asset is given out of familiar sources of the partner then it doesn’t come under Benami transaction hence, under Section 4 it only follows Benami transaction. In such situations, the husband can not claim the name of the property disregarding of the fact that the property is in the title of his wife.
WHAT COURT KEEP IN MIND DURING THE DISTRIBUTION OF THE PROPERTY
No permanent rules are there to apply during the division but the court keeps in mind some factors.
Firstly, the comfort and safety of the children thus, the children should get the accommodation facilities.[[iii]] This factor does not shut the eyes to another party who does not give a home to children rather it will be done in just manner thinking about the financial conditions according to the situation. But the children’s comfort thus needs the proper ordering for their financial requirements.
Secondly, remaining money and other resources thus, all the details should be revealed by both the parties. And the court will take all the before, current, and future proportions of the income of both parties during the divorce proceeding. And even the relationships they have now with someone else and their financial capacity as a child is in first concern.[[iv]]
Thirdly, both the spouse monetary requirement commitments and responsibilities thus, what a partner needs on the subject of their income and capital. Both the mate needs to run their lives. Thus, their capacity to run the house their now and after situation should be kept in mind and have to draw up estimated amount, they need to run the house basically.
Fourthly, their ages and their period of the marriage thus doesn’t matter what court will try to split the property in an equitable manner. If the marriage is longer then a different situation will take place while age also affects the capital of the parties.
Fifth, the Quality of living they enjoyed before the marriage dissolution thus, the court takes this situation as a concern because to balance the lives after the dissolution. But dismally they don’t get to enjoy the same life after the marriage dissolution.
Sixth, some physical or mental inability of the mates thus, their mental and physical situation is also in concern so medical evidence is normally required to know the situation after the dissolution their marriage they can handle their lives or not what requirement is needed by the mate is in concerned.
Seventh, both the mate offerings thus, maybe in their marriage one has worked other has taken care of the house, children’s, etc so how much they have contributed to run the house and family. Contribution is important if they have done an equal part from themselves but much will depend on when the inheritance was obtained and in case it has been intermix with other marital property.
Eighth, waste of any well-being by reason of the divorce thus, The Court has the potential to form a pension sharing order which makes this asset be split.
Lastly, bad conduct thus, The Court will barely have to conduct if it is so significant that it would be unjust for the Court to ignore it.
IS IT TREATED FAIRLY?
Distribution of the assets i.e., home, retirement benefits, securities, household, vehicle, valuable collectibles became difficult to distribute in the affair and just manner between the parties. The court basically distributes the matrimonial properties partly. This doesn’t mean the properties divided will be in half thus, one might get furniture and another vehicle. And even the court can give one party extra property than the other party if the court finds it reasonable to do so.[[v]]
It is important to understand the state requires law on property in a divorce. If we take the community property state as an example, where a partner gets possession of anything possessed before marriage encompasses an inheritance but most of the states took rules that put into the just distribution of marital property. Still, distribution of the assets may not be always equitable and just.
If the partners come to an agreement on distributing the most disputed property, then the divorce will run a little evenly.
In the case of White v White 2001, the English court declares that both the partners should get the financial and domestic endowment in a fair and estimated manner and the court justifies the meaning of Section 25 (2) (f) of the Matrimonial Causes Act, 1973 which says it does not focus on the benefaction of the parties but rather pitch about the benefaction construct by the spouses towards the welfare of the family.
REFERENCE
[[iii]] (How are Property and Debts Divided in a Divorce?)
[[v]] (Division of Property between Husband and Wife after Divorce, 2020)
URL:
(1) https://www.collascrill.com/knowledge-documents/guides/how-the-court-decides-who-gets-what/
(2) https://www.divorcenet.com/states/nationwide/property_division_by_state
(3) https://www.indianalegalservices.org/node/46/how-are-property-and-debts-divided-divorce
(4) https://www.nelsonslaw.co.uk/court-divide-matrimonial-assets-divorce/
(5) http://lawzilla.in/uncategorized/division-of-property-between-husband-and-wife-after-divorce/