A recent survey done by 1 Finance indicates that divorce in India is no longer just a social and emotional rupture, rather, it is fast emerging as a financial event that reshapes lives, assets, and long-term security.
The survey is based on 1,258 divorced or divorcing individuals across Tier 1 and Tier 2 cities. It throws light on the financial fault lines of separation, while financial planners argue that the real challenges often lie beyond statistics, in courtroom realities and cultural taboos.
The Survey Findings
The study revealed some stark gendered patterns:
- Heavy Costs: 19% of women and 49% of men spent more than Rs. 5 lakh on divorce proceedings
- Debt Stress: 42% of men borrowed to pay alimony or legal fees; nearly 30% of those paying alimony had a negative net worth
- Income Drain: On average, men reported 38% of their annual income going towards maintenance
- Alimony Gains: 53% of women received over 50% of their husband’s net worth as alimony, and in 26% of cases, it exceeded the husband’s entire net worth
- Workforce Exit: 46% of women reduced work intensity or quit jobs post-marriage, making them financially vulnerable at separation
While talking about the survey, Keval Bhanushali, CEO and Co-Founder, 1 Finance said, “Financial incompatibility is among the leading causes of divorce. Two-thirds of respondents reported frequent money-related arguments, and the costs of divorce only deepen the strain.”
Kanan Bahl, Editor-in-Chief, 1 Finance Magazine, added: “Finances remain taboo in Indian households. But 43% of respondents cited money disputes as a reason for divorce—proof that clarity on debts, family obligations, and lifestyle standards must be agreed upon at the outset of marriage.”
Numbers Don’t Tell the Whole Story
Despite the numbers and the results of the survey, financial planners caution that data needs to be understood alongside real-world practices.
Kavitha Menon, Founder, Probitus Wealth, pointed out that many men restructure assets before divorce. “They move property to parents or relatives, while retaining loans. Courts are aware of this and demand years of financial records. Most genuine distress cases arise when jobs are lost or incomes shrink and not because men lack assets,” she said.
She also added that Indian courts are rarely unfair and “Alimony is decided based on earning capacity. In fact, many claims get reduced or rejected if the court sees misuse.”
Menon stressed unlike predictable goals like child education, divorce is almost impossible to pre-plan financially. But she urged couples, especially HNIs, to consider prenuptial agreements, which are slowly gaining acceptance in India.
Financial Planning Meets Reality
Apurva Bhat, Managing Partner, Aniram, recounted how one client’s divorce turned into a financial tug-of-war, with disputes over gold, joint investments, and claims on ancestral rental income.
She explained that divorce planning is still taboo. Most couples are focused on aspirational goals like schooling, early retirement which is why alimony never enters the picture until it hits.
Bhat suggests practical steps:
- Maintain separate investment accounts to simplify division
- Use ‘what if’ scenarios of planning during financial advisory sessions
- Encourage regular wills and estate planning to avoid post-separation disputes
She admitted that even with planning, complications won’t vanish. Divorce is too sensitive and full of unknowns. The best long-term solution is prenups and better financial awareness.
An Insurance for Divorce?
Saravanan S., Co-promoter, Purplepond Financial Planners, proposed a bold idea: marriage insurance.
“Just as doctors buy indemnity cover, couples could insure their marriage. If divorce occurs under specified conditions, the policy could cover alimony payments,” he suggested.
Alternatively, he also advised building of an alimony corpus. He suggested to create a pool of funds earmarked for separation that, if unused, becomes retirement wealth.
Saravanan also pointed out the role of estate tools like trusts to ring-fence parental property from alimony claims, and the need for structured cashflow planning for single mothers’ post-divorce.
Conclusion
The consensus is clear, while divorce-related financial planning is still rare in India, rising cases mean the conversation cannot be avoided. Prenups, estate planning, and better financial disclosure may slowly replace today’s secrecy and improvisation.
As Bhanushali of 1 Finance put it, “Money talk before marriage may feel uncomfortable, but it is far cheaper than money talk after marriage.”
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