Mona wanted to keep the process dignified. She did not harm her husband, nor was she ready to quarrel and quarrel. However, questions of finance Grown up Mona was only 48 years old. She wanted to understand that he needed to amicably work through the financial issues of the separation.
The law of the land gives a divorced woman ongoing maintenance (also called alimony) from her husband. In an acrimonious separation, the court may ask the man to offer up to 25% of his monthly revenue as alimony. In a mutually agreed divorce like Mona, the couple can negotiate and agree to the terms and notify the court during the divorce proceedings. Alimony is not subject to monitoring by any legal authority or the police. If the wife does not receive it or needs revision, she will have to approach the court again. Failure to pay alimony as directed by the court is an offense punishable with a prison sentence, and the court may confiscate bank accounts or property. payment, Maintenance allowance is also taxable as income in the hands of wife.
Mona may be better off opting for a one-time lump sum payment at the time of divorce. Firstly, it is a capital transfer and is not taxable as income in his hands. Second, he does not need to follow up, seek courts or procedures to get alimony every month. Thirdly, the payout is insured against the risks of loss of job, death, loss and so on to the income of the husband. Fourth, it can use the lump sum amount to get the benefit of capital growth and income as per the requirement.
Mona did not go to work and did not enjoy her own income. They have two properties in joint names. The legal situation with respect to properties after divorce is fraught with many complexities. If the wife has no income and cannot establish that she contributed to the property, she may not be able to claim any ownership rights.
The courts have ruled that the property belongs to the legal owner (husband) and not the real owner (wife). However, the courts favorably fair and equal distribution of wealthIncluding property, in case of divorce. The wife is able to claim one third of the property including immovable property. What is unquestionably his is Stridhan, which covers all the movable property given to him on the occasion of his marriage.
Mona does not consider her divorce acrimonious. She is unwilling to go to court to assert her claims and feels that she should go with whatever she can get from her husband. However, without a formal claim to a portion of his marital property, he would have little left to take care of himself.
Family courts have tremendous powers to investigate household assets and try to reach a fair and equitable settlement in divorce. The division of property may not be equal, but he should assert his rights for equitable disposal.
If only asset financing and ownership is a criterion, then nothing can be left to him. By giving up her rights, she may lose her chance to represent her position and enable the court to rule for an equitable distribution of wealth. A lump sum payment on separation and a fair share of both movable and immovable property are within her rights to receive as settlement at the end of the divorce proceedings.
Mona does not belong to the modern generation who sign pre-marriage pacts. Nor does he have a record of the purchase of simple assets like gold and jewellery. Most movable assets such as deposits, bonds and investments are held in the name of the spouse. Hence, Mona has no option but to rely on the court to consider all the assets, whether they are singly or jointly, and pass a decree for partition. She runs the risk that an out-of-court amicable settlement may not always work in her favor.
Mona will also lose all her rights to be enrolled in the provident fund and her husband’s insurance policies. She needs to reconcile the fact that she will get a part of the money and lump sum payment in lieu of monthly alimony and seek a clean break from any right to any property held by the husband. He must seek legal and financial advice to ensure that competent professionals enable him to list, claim, contest and obtain his fair share of property.
In Mona’s case post-divorce financial management would be one of prudent management of assets. He hasn’t dealt with finances before; Nor does she understand the world of investing much. His daughters support his decision and are willing to invest their payments carefully. He should trust them and avoid falling prey to eager sellers of financial and insurance products.
Mona’s portfolio should be managed as if it were a retired person’s corpus. He needs both income and capital appreciation. An increased focus on fixed income products would put them at risk of corpus insufficiency, especially taking into account their age. Given its low level of risk tolerance, it is unlikely to be overweight on equity and growth assets. A simple combination of equity index funds and deposits should meet his needs well. She wants to live independently as long as she wants.
She considers a retirement home as an option that will not burden her daughters with taking care of them in their old age. But he should not be in a hurry to buy such properties. She will lock up her money and pay unnecessary premiums for features that may or may not be ready to go ahead 20 years from now. Getting a divorce after so many years of marriage is bold and unconventional by her standards. He needs to bring the same attitude to managing his wealth, putting his own preferences and interests above all else and not settling for painful compromises that seem like the social norm.
(The author is chairperson of the Center for Investment Education and Learning.)