Fighting a divorce? Know how property, money, other joint assets are split in case of breakups

It's common for individuals to go into marriage with the hope that it will last a lifetime. The end of a marriage, however, often brings a surge of emotions such as anger, sorrow, worry, and fear. These feelings can catch you off guard at unexpected moments. 

Recently, there have been rumours about the marriage of actor-choreographer Dhanashree Verma and her cricketer-husband Yuzvendra Chahal. The couple unfollowed each other on Instagram, with Yuzvendra also deleting all pictures with Dhanashree. On the other hand, Dhanashree unfollowed Yuzvendra but has not deleted any pictures with him. Sources close to the couple have confirmed to Times Of India that the divorce rumors are indeed true.

While it's expected to experience emotional upheaval during a divorce, one may not initially realise the full extent of the financial impact.

The costs of divorce can be substantial, especially for the ultra-wealthy who may face settlements worth millions or even billions of dollars. Middle-class couples, particularly those going through "grey divorces" later in life, can also experience significant financial strain. 

Business Today spoke to Dinesh Jotwani, Co-managing Partner, Jotwani Associates, about divorces and managing money matters thereafter. Edited excerpts:

1. How property, money and joint assets are divided in case of divorce and separation?

In India, courts have established a legal principle that aims to maintain the same standard of living for both spouses after separation. If the wife has no income and cannot earn, the income and assets of husband should be divided equally. If children are involved, the parent with custody will receive more than a 50 percent share. 
Furthermore, the law allows for temporary maintenance during litigation, known as maintenance pendente lite. This maintenance is determined by factors such as the income and assets of each spouse, their education and earning potential, age, and custody of children. The court considers all these factors when deciding on the amount of maintenance to be given to a spouse.

2. Does a prenup agreement help in such cases?

The prenup agreements in India are not valid. They cannot be relied upon for grant of maintenance. However, the prenup agreements are becoming common these days to avoid Dowry Harassment Cases, where the families of both the Husband and Wife enter into agreement declaring that quantum of dowry so that there is no confusion between the parties at a later stage.

Prenuptial agreements are gaining popularity in India despite their questionable legal enforceability. These agreements are often used to establish a record of financial transactions and asset ownership, aiming to prevent future disputes, particularly dowry-related harassment cases. By documenting details such as dowry amounts, wedding expenses, and gifts exchanged, prenuptial agreements can serve as valuable evidence if marital issues arise. Although their enforcement in court remains uncertain, these agreements are increasingly seen as a proactive measure to protect both parties in the event of a marriage breakdown.

3. In the absence of a prenup arrangement, how should one navigate?

If a prenuptial agreement is not in place, it's crucial to document dowry items, financial and real assets, income, bank accounts, marriage expenses, and gifts received during the marriage. This record functions similarly to a will, ensuring clarity in asset division and inheritance even in the absence of a formal will. Likewise, without a prenuptial agreement, either or both spouses should maintain and potentially have the other spouse or their family countersign a list of assets. This practice can help foster trust and transparency, especially in the early stages of marriage.

4. What tips will you give to a couple getting divorced?

In India, divorce was historically uncommon, with couples often choosing separation over legal dissolution. The introduction of the Hindu Marriage Act in 1956 formalised the concept of divorce, but the process can be lengthy and emotionally taxing, potentially lasting years or even decades if appeals are involved. This extended legal battle takes a significant toll on the mental health of both spouses and their families, particularly if child custody is disputed.

Therefore, couples considering divorce should prioritise a mature and amicable approach, focusing on achieving a swift and respectful resolution. While financial concerns may arise, the long-term benefits of avoiding a protracted legal battle outweigh the short-term costs. By choosing a graceful divorce, couples can minimise the emotional damage and protect the well-being of themselves and their families.