The Non-Muslim Marriage and Divorce Reform Act was officially implemented nationwide on 1 March 1982. When clients applying for divorce ask me how the court will distribute the marital property between the couple, I can confidently tell them that the contribution of the spouse is a very crucial keyword. However, this was the practice before 2017. After 2017, the revised law tends toward fair distribution.

In the past, when hearing divorce cases, the court would not only look at how long the marriage had lasted but also which party caused the marriage breakdown, the economic capabilities of both parties, and the needs of minor children born from the marriage. The final distribution was based on the contributions of both parties to the marital property.

First, we need to understand what constitutes marital property. Under Section 76 of the 1976 Marriage and Divorce Reform Act, marital property is defined as assets acquired by the couple through joint effort after marriage, including movable and immovable property. This means that regardless of whether it’s real estate, bank deposits, company stocks, shares, or employee provident funds, all can be included in the distribution range.

In terms of real estate distribution, the law stipulates that property purchased before marriage or inherited from ancestors is not considered marital property, unless the spouse contributed financially to the renovation of the property during the marriage. In such cases, the spouse has the right to request that the property be regarded as marital property for distribution.

As for bank deposits and stocks, since their amounts are constantly changing, the court generally uses the value on the day the divorce decree is issued as the standard. Of course, when filing for divorce, the representing lawyer will also legally prevent the spouse from freely using these assets until the divorce proceedings are concluded.

Depend on the Duration of Marriage and the Reason for Breakdown

Many couples establish companies and start businesses together after getting married, and such companies can obviously be classified as marital property. However, some companies are entirely unrelated to the spouse’s efforts. Still, if the spouse can prove they contributed by taking care of the children at home, this is also considered a contribution, and they can claim the company shares as marital property.

Nowadays, the marriage court includes provident funds as marital property that must be distributed. Divorcees need to be mentally prepared to face the significant reduction of their provident funds after divorce.

When the marriage court determines which properties are marital properties that must be distributed, the next question is how to distribute them. At this time, factors such as the length of the marriage, the reason for the marriage breakdown, and the contributions to the marital property will be considered by the judge.

The 2017 amendment to the 1976 Marriage and Divorce Reform Act specifies that the court will distribute marital property based on a 50-50 principle, with the share being reduced based on the fault of the spouse. In other words, in all divorce proceedings, the party possessing the property must be prepared to lose half of it upon divorce.

Getting married is easy, but getting divorced is difficult. To avoid potential unfair marital property distribution, especially concerning company shares, it is recommended that the party owning company shares sign a prenuptial or postnuptial agreement with the spouse, clearly stating the distribution method of the company shares in the event of divorce.

Although our country’s law has not yet recognized the validity of prenuptial and postnuptial divorce agreements, having such an agreement can at least provide the judge with a reference to avoid the company facing collapse due to the shareholder’s divorce.