How Will Divorce Affect You Financially?

The Supreme Court of Kenya ruled that spouses aren't eligible for half a share of marital property in a divorce. The declaration got many people guessing what lies in store, and unsure of subsequent consequences. While typical divorce issues touch on concerned individuals, children, and families, the financial implications can also be huge.  

According to the 2013 Matrimonial Property Act, proof of contribution is crucial when settling finances. But then that's only part of it. Each spouse's income determines the court's orders regarding maintenance.  

Before the ruling, each spouse is supposed to declare their total income and expenses. The divorce court assesses all liabilities/debts to issue a command on spousal and child support. This article will expound on various financial aspects of divorce.

5 Things to Know About Divorce and Finances

There are several fundamental financial aspects of a divorce you need to know about. For  example:

Can You Settle Out of Court?

Divorce causes numerous stresses, including financial ones. It's not surprising that divorce lawyers get a lot of money. However, as you prepare to settle into single life, possibly with children, you will require as much money as possible.

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Settling out of court is one of the various options to work out spousal maintenance, child support, and child custody. An out-of-court settlement enables you to save on those massive  court visitation costs. To  hack this process:

• Speak to your divorce lawyer for legal advice regarding this option. 
• Have a proper and honest sit-down and talk with your spouse to find a financial middle ground. 
• Help your lawyer gather complete financial information that might determine spousal, child support, and marital property divisions.
• You can also opt for a mediator to resolve any contentious issues in the divorce.
• The final step is for you and your spouse to sign the final agreement and submit it to the divorce court.

Read Also: Debt and Marriage: Key Things You Need to Know

Does the 50/50 Rule Apply?

According to the landmark ruling, the 50/50 rule will no longer apply. The law now considers a spouse's contribution during marriage when deciding who takes what.

If there isn't an equal contribution towards the marital property, it would be unfair for the other party to reap where they didn't show. 

The exception is for spouses who might not have given a direct monetary contribution but played supportive roles such as household chores. In this case, the spouse can claim a share of the wealth, though not on a 50/50 basis. 

How does the law determine spousal contributions? The court will take into account: 

•  A spouse's contribution towards the purchase of marital property (document to show).
•  Any regular/monthly contribution towards buying marital assets.
• Evidence of contributing to the welfare of the household both physically and materially. 

Division of Marital Property 

Marital property might entail houses, land, and other assets you acquire in your marriage. 

These take center stage in any divorce court. Your lawyer will need to help document every purchase within your marriage.

The law indicates that all property acquired during your union is vested in both spouses according to their contribution. The court divides these assets between the spouses upon marriage dissolution.

With the recent changes in the constitution, the court recognizes unpaid care roles at home during marital property division.

But experts say spouses shouldn't work on assumptions. Instead, it would help if you documented each crucial contribution during the marriage. Documentation of receipts, vouchers, and signatures can help prove your contribution to acquiring marital property. 

In a sale agreement, your appended signature is evidence of the division of assets. 

What if you contributed several iron sheets, cement, or labor to construct your house? The receipts you submit in court vouch for you. 

Read Also:7 Things Every Woman Should Know About Family Finances 

Spousal and Child Support After Divorce

The two most crucial financial aspects of divorce are spousal and child maintenance. Spousal support caters to a financially incapable partner, while child support is for kids below 18 years. 

How does the court calculate spousal maintenance? Various statutory provisions, plus the ruling judge's discretion, will guide the amount of money allocated to a spouse. The court will also consider the child's welfare in determining this aspect of financial support. Some of the factors include:

• Age of each spouse and length of the marriage. 
• The physical, emotional, and mental health of each spouse.
• Each spouse's current income and earning capacity. 
• Future revenue and earnings capacity. 
• Financial obligations of each spouse now and in the future.

A point to note: A divorce court may also order urgent spousal support if a spouse who has been financially supporting you cuts you off abruptly.

What About the Prenup and Post-Nup Agreement? 

Both prenup and postnup agreements can have substantial financial implications during a divorce.

A prenup, also known as a premarital agreement, is a private couple agreement before they marry. The signed agreement shields your assets and finances during a divorce, since they are off-limits, and your spouse can’t claim a share.

If you have substantial assets before marriage you should never throw caution to the wind. Instead, use your lawyers to agree on a prenup. Some of the essentials include: 

•  Each spouse uses their lawyer to help agree on the fairest prenup.
•  Fully disclosing your assets, including if there is a future inheritance.
• Plan your prenup long before you can marry, as it enables you to put everything into order.
• An effective prenup also sets the terms for spousal maintenance during a divorce.
•  Some prenups waive alimony, meaning you or your spouse aren't entitled to spousal support after marriage dissolution.

 Suppose there isn't any provision in the agreement touching on alimony. The court can then order spousal maintenance for a partner. 

Postnup Agreements

Postnup agreements are almost similar to a prenup. The only difference is that they take place after a legally binding marriage. These contracts are still new in the Kenyan legal context, and there aren't statutory provisions that support them. However, the court can assess the agreement as it would any lawful contract and order its implementation.

The courts consider a postnup as a binding document that springs from the willingness of a consenting married couple. It can only stop its enforcement if the agreement is out of coercion or fraud.

 A postnup agreement becomes advantageous if:

•  The couple didn't sign a prenup before their marriage.
•  A spouse has more assets or a higher income than their partner.
•  A spouse wishes to protect assets they acquired before marriage.

As a prenup;

• It's prudent for each spouse to have lawyers. 
• Spouses should be open to disclosing their assets before marriage and within the marriage
• Agree on a fair prenup, so no one feels duped
• Set clear terms regarding divorce and division of assets.

Wrapping Up

What happens once the court dissolves a marriage? If the recent court ruling is anything to go by, then individual contributions in a marriage determine how much you gain financially after divorce. The equal share rule applies only if you show proof of your contributions. It's another story regarding spousal and child maintenance as the court evaluates each partner's current income to issue the ruling.