Division of property after a divorce – what is worth knowing about it?

Table of Contents

When is the division of property possible?
What does the statutory marital community of property consist of?
What is the spouses’ joint property?
Spouses’ joint property – what does it include?
The personal property of each spouse
Is it possible to divide joint property before a divorce?
What are the methods of dividing property after a divorce?
Contractual division of property after a divorce
Court-ordered division of joint property after a divorce
Summary
FAQ – frequently asked questions and answers

 

A court judgment granting a divorce is not the end of all matters – you still need to settle several issues related to the dissolved marriage. One of the most important of these is the division of property after a divorce. How should it be carried out? How long does such proceedings take? You will find all the most important information in this article.

 

When is the division of property possible?

In order for a division of property to be carried out, two conditions must be met. First, a statutory community of property must have existed between the spouses. Without it, joint property does not exist at all, and therefore there is nothing to divide.

Second, there must be an event that causes the community of property to terminate. The most obvious example is a divorce granted by a court, which is what this article focuses on. It is worth noting, however, that there are many other reasons for the termination of the community of property. This may also occur, for example, as a result of a court-ordered separation or the death of one of the spouses.

 

What does the statutory marital community of property consist of?

Since the division of joint property after a divorce applies only to the statutory marital community of property, it is worth explaining what this regime involves.

Let us go back in time for a moment. Before you became husband and wife, each of you had only your personal property. It was your exclusive property. This means that all the money you earned, real estate you purchased, and gifts you received belonged solely to you.

However, at the moment of marriage, the situation could change. You had a choice: either establish a separation of property or take no action, in which case the statutory regime provided for by law would apply – namely, the community of property.

Some couples decide at this stage to protect their interests as much as possible. Instead of later wondering how to avoid the division of property and whether a division of property after a divorce is even necessary, they immediately establish a separation of property. This allows them to avoid many problems in the future. Often, this is not a sign of mistrust but rather a way to protect shared interests – for example, when one spouse runs a high-risk business.

Most marriages, however, either are not aware that separation of property is an option or, for various reasons, do not wish to establish it. This does not mean, however, that from that point on everything becomes joint property.

In total, there will be three separate property estates:

• your personal property – all property accumulated before marriage, as well as certain assets acquired during the marriage that, under the law, belong to personal property,
• the personal property of your spouse,
• your joint property – which includes most of the assets accumulated from the moment the marriage is concluded.

 

What is the spouses’ joint property?

Joint property consists of assets acquired during the period of the community of property. What exactly is included in it, and which elements instead belong to the spouses’ personal property, is precisely regulated by law.

It is also worth noting that both before marriage and during the marriage you may conclude a marital property agreement under which you may decide that:

• you establish a separation of property – meaning that you do not have any joint property at all and your situation in this respect is the same as before marriage; in such a case, you do not need to consider how to avoid the division of property after a divorce or how to regulate your property matters upon dissolution of the marriage,
• you wish to have joint property but to a limited extent – excluding certain elements that will belong to your personal property,
• you decide to extend the scope of joint property – certain elements that would normally belong to personal property will instead become joint.

 

Spouses’ joint property – what does it include?

Unless you have concluded a marital property agreement regulating this matter differently, joint property includes:

• remuneration for work received and income from other gainful activities,
• income from joint property and income from the personal property of each spouse,
• funds accumulated in an open or employee pension fund of each spouse,
• amounts of contributions recorded in a pension sub-account,
• items of so-called ordinary household equipment intended for the joint use of both spouses.

 

The personal property of each spouse

Personal property includes:

• all assets acquired before the establishment of the community of property,
• inheritance, gifts, and legacies – unless otherwise stipulated,
• property rights arising from joint ownership without fractional shares,
• assets serving exclusively to satisfy the personal needs of one spouse – for example, related to their hobby or profession,
• non-transferable rights that may belong only to one person,
• assets obtained as compensation or damages – excluding annuities due to total or partial loss of earning capacity or increased needs or reduced prospects for the future,
• claims arising from remuneration for work or other gainful activity of one spouse – i.e., money that may be enforced but has not yet been paid,
• assets obtained as a result of personal achievements,
• copyrights and related rights, industrial property rights, and other rights of the creator,
• assets acquired in exchange for elements of personal property – subject to certain statutory exceptions.

 

Is it possible to divide joint property before a divorce?

As you already know from the previous sections, you may decide to establish a separation of property during the marriage.

This means that you may still be a happily married couple with no plans to separate, yet for various reasons decide that establishing a separation of property is the better solution. In such a case, you would conclude a special agreement before a notary or regulate the matter through the court.

However, you would still need to determine how to divide the assets that previously constituted joint property. In this way, you would carry out a division of property without getting divorced.

Moreover, if you plan to end your marriage but expect the divorce proceedings to be lengthy, you may divide the joint property even before the court grants the divorce. You have two options in this regard – to do so by agreement (provided you fully agree on the division) or through separate court proceedings.

 

What are the methods of dividing property after a divorce?

As mentioned earlier, the division of property after a divorce may be carried out either through court proceedings or by agreement.

There are three methods of dividing your assets:

• sale of all assets and division of the obtained sum (civil division),
• allocation of individual assets into exclusive ownership (physical division),
• division of property after a divorce by awarding specific assets (e.g. real estate) to one spouse with an obligation to compensate the other.

 

Contractual division of property after a divorce

The fastest way to divide joint property after a divorce is by concluding an agreement. In theory, such an agreement may take any form. However, if the joint property includes real estate or a business – which is often the case – a visit to a notary will be required.

Importantly, a contractual division of property after a divorce is permissible only if both parties are fully in agreement as to the division itself, the method of division, the composition of the joint property, and its value. Unfortunately, many former spouses are unable to meet all these conditions, in which case court proceedings become necessary.

 

Court-ordered division of joint property after a divorce

If you fail to reach agreement on all of the above matters, the only remaining option is a court case for the division of property after a divorce – provided that you did not request the division earlier as part of the divorce proceedings themselves.

Assuming that this did not happen, one of you must file an application for the division of joint property after the divorce and indicate in particular:

• what constitutes the joint property,
• the value of each asset,
• how the division of property should be carried out.

It is also worth noting that the costs of the division of property after a divorce will vary depending on whether you submit a joint agreed division plan with your application or leave all determinations to the court.

In simplified terms, the more issues you agree on, the shorter the proceedings will be and the lower the associated costs.

As part of court proceedings, you may not only request the division of property but also seek the determination of unequal shares in the joint property, as well as reimbursement of expenditures, expenses, and other contributions made toward the joint property.

You may also request:

• Unequal division of property after a divorce – as a rule, property is divided into two equal shares. However, if one spouse contributed significantly more to the creation of the joint property, you may request a different arrangement. In such a case, the court will determine unequal shares, taking into account the degree to which each spouse contributed to the joint property. Contrary to a common misconception, the existence of children and their place of residence does not affect the determination of unequal shares, although it may influence which spouse is awarded ownership of the jointly owned property.
• Reimbursement of expenditures and contributions made toward joint property – if, during the community of property, one spouse incurred expenses from their personal property for the benefit of the joint property, they may request reimbursement during the property division proceedings. An example would be a jointly purchased house where one spouse paid for renovations using inherited funds (i.e. personal property). Such contributions may also include personal labor that increases the value of an asset (e.g. personally carrying out renovation works).

 

Summary

As you can see, the division of property after a divorce is a complex issue. Much depends on your financial situation during the marriage, your ability to reach agreement, and the method you choose for the division. If you have any doubts regarding the method of division, the value of the property, or the possibility of establishing unequal shares, it is worth seeking legal assistance.

 

FAQ – frequently asked questions and answers

Lack of property division after a divorce and inheritance – how does it work in practice?
Failure to divide property after a divorce does not prevent inheritance. As a rule, the former joint property is divided into two equal shares, and only the deceased spouse’s share is subject to inheritance. However, heirs may apply for the determination of unequal shares in the joint property – for example, due to the fact that the deceased solely covered all maintenance costs of the jointly owned real estate.

Division of property after a divorce – legal regulations
The division of property after a divorce is regulated by the Family and Guardianship Code, while procedural matters such as court jurisdiction, preparation of the application, and conduct of the proceedings are governed by the Code of Civil Procedure.

Lack of property division after a divorce – when is it possible?
If you and your spouse had a separation of property, each of you had only your personal property. As a result, you do not have joint property, and conducting property division proceedings after a divorce is unnecessary.

Is the division of property after a divorce mandatory?
The division of property after a divorce is not required if a separation of property applied during the marriage. Even if you did have joint property, you do not need to divide it through court proceedings – you may do so amicably by agreement, provided that you reach consensus.

Is it possible to sell real estate after a divorce without dividing property?
You do not need to conduct court proceedings to divide joint property in order to sell a jointly owned house, plot of land, or apartment. Acting jointly as co-owners, you may sell the real estate after the divorce without dividing the joint property and then split the proceeds between yourselves.

Who has the right to the house after a divorce?
If one spouse purchased the house before marriage, it belongs solely to that person both during the marriage and after the divorce. If the property was purchased jointly and forms part of the joint property, you may either reach agreement as to who keeps the house or leave the decision to the court. In such cases, the court usually awards ownership to one spouse with an obligation to compensate the other.