Dividing assets after divorce easier now

Dividing assets after divorce easier now

 

Recent CPF rule changes will help divorced women get their fair share from sale of matrimonial home

 

By Lorna Tan

 

DIVORCED couples have benefited from recent changes in Central Provident Fund (CPF) rules, which allow for a more ‘equitable’ distribution of their CPF monies when they divide their matrimonial assets.

 

Previously, divorced women often got very little from the sale of the matrimonial home. The changes, which came into effect on Oct1 last year, are an attempt to help them get more money and not face financial hardship.

 

One of the changes allows a member to transfer money from his or her CPF account into the CPF account of his or her former spouse.

 

For instance, under the old ruling, if $100,000 had been used out of a member’s CPF account to buy the matrimonial property, the $100,000 would have had to go back into his CPF account together with the accrued interest once the property was sold. This was the case even if the court had awarded his ex-spouse half the proceeds, or $50,000. The reason was that members were not allowed to withdraw their CPF money until the age of 55.

 

With the change, the court can order the transfer of $50,000 from the member’s CPF account into his ex- spouse’s account.

 

Another change allows for the immediate transfer of a piece of property to the former spouse.

 

In the past, when a member had used his CPF money to buy property and the court ordered ownership to be transferred to his ex-spouse, the member had to return the due amount to his CPF account.

 

In cases where a wife had no money to make the refund to her ex-husband’s account, the transfer could not take place. The court might then have to order a sale of the property, which might not be ideal in a weak property climate.

 

With the rule change, the member or his former spouse no longer needs to put back into his CPF account whatever money had been taken out for the property.

 

But should the former wife wish to sell the property later, she will be required to refund her own CPF monies withdrawn, as well as what her ex-husband had withdrawn.

 

So far, five divorce cases handled by law firm KhattarWong have benefited from the revised rulings. So too four handled by another law firm, Characterist.

 

Source: Straits Times

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