Division of marital property

If spouses do not have a prenuptial agreement drawn up with a notary prior to the marriage, they are married by operation of law in full community of property. This basically means that everything the spouses own in goods, rights and debts, belongs to them both and that each is entitled to half. No distinction is made between what was acquired before the marriage and what was acquired during the marriage.

Dissolution of community of property

If there is a community of property, at the time of the divorce this community of matrimonial property will first be dissolved and then divided. The dissolution takes place when the divorce petition is filed with the court. Dissolution means that nothing more is added to the community and nothing is taken away from it. What remains is a package of assets and debts, which must be divided between the spouses.

Division of the matrimonial community of property

After dissolution, one proceeds to the division, also called the estate division. In short, this involves dividing the assets and debts between the spouses. The most practical approach is to draw up in advance a list of the assets and debts that fall within the community of property and must be divided, along with the value of the assets and debts. By then allocating each separate asset to one of the partners, it is possible to see what the value of the total assets and debts a spouse acquires from the community of property is. If one spouse receives more than the other, then he or she will have what is known as an over-allotment debt. The starting point is that each is entitled to half of the dissolved community of property.

Valuation of community property

At the moment of dissolution of the matrimonial community of property, the community of property freezes. All possessions and debts present at that moment constitute the extent of the dissolved marital community of property. However, the value of the assets to be divided is only determined at the time of division. Thus, there are different reference dates for the size of the community (the moment of dissolution) and the valuation of the community (the moment of division). Often a value is attached to the various assets by mutual agreement, in order to make the division practical. In the case of a home, for example, it may be agreed that a real estate agent will provide binding advice on the value of the home.

Decision by the court

If the parties cannot reach an agreement regarding the division, the judge will have to make a decision. First of all, the judge can determine who has the greatest interest in allocating a particular asset. Furthermore, the judge can determine the value to be assigned to a particular asset; this is generally preceded by an expert valuation.

Private assets

There are some exceptions to the marital property regime. Assets obtained by gift or inheritance, to which an exclusion clause is attached, do not fall within the community of property and are private assets of the acquiring spouse.

Another exception concerns assets that are connected. Attachment is rarely the case. An example of a connected asset is immaterial damages.

Own house and divorce

You want a divorce while you and your partner own a house. The house is mortgaged and you have jointly signed for it. Because of the divorce, it is likely that you cannot continue to live in the house. What now? There are three options: divide the house, sell it or leave it undivided. You can agree with your partner who will continue to live in the house for the time being.

Own house and limited community of property

If spouses do not sign a prenuptial agreement with a notary prior to the marriage, they are legally married in a limited community of property. This basically means that everything the spouses own in goods, rights and debts, belongs to them both and each is entitled to half, with the exception of what one owned before the marriage, gifts and inheritances.

Valuation of the house in a divorce

At the time of dissolution of the matrimonial community of property, it freezes, so to speak. However, the value of the property to be divided is only determined at the time of division. Often, a value is attached to the various assets by mutual agreement, in order to practically settle the division. In the case of a home, a real estate agent can advise on the value of the home through an appraisal report. In mediation, the divorcing partners discuss the value of the home with each other, subject to expert advice. The spouse who wishes to remain in the home provides a mortgage offer which is involved in the method of division and discharge from joint and several liability.

Judge's decision on the division of the home

If you and your partner cannot agree on the division of the home, the judge will have to make a decision. This is a last resort. The judge can determine who has the greatest interest in partitioning the home. Furthermore, the judge can determine the value to be assigned to the home; again, an appraisal report will be requested in all cases. In addition, the divorcing partners will have to prove that they can finance the home by submitting a mortgage offer. In some cases it is better to sell. If the other partner does not want to leave the home, substitute consent can be requested so that the sale process can be initiated. The court will always weigh the facts and circumstances of the case.

Fiscal aspects

Because of the mortgage deduction possibilities it is important to get good tax advice when the house is part of the matrimonial community of property. Even when you are married under a prenuptial agreement, it often happens that you own the home together and need to make arrangements about whether or not to continue the tax partnership in the year you are divorcing in order to optimize your tax options.

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