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Attorney Milena Nowicka
What is the division of joint marital property?
What is included in joint marital property?
Division of an apartment after divorce – how can it be carried out?
Division of property and a joint loan
How is property divided after divorce? Determining shares, reimbursement of contributions, and expenses related to joint property
Determining unequal shares – when is it possible?
Settlement of contributions when dividing property
Division of spouses’ joint property – in court or before a notary?
Division of joint marital property before a court
FAQ
A divorce is not yet the end of the road when it comes to sorting out all matters connected with a marriage that is coming to an end. Very often, former spouses are still linked by loans, real estate, and other shared material assets. What must you do if you find yourself in such a situation? And if you believe that an equal division of joint property is unfair, can this issue be resolved in a different way? Thanks to this article, you will gain knowledge about the termination of the marital property regime, which will certainly be helpful to you during this difficult and stressful time.
When specific assets become the exclusive property of only one spouse, we speak of a division of joint marital property. However, this does not have to take place immediately after the divorce. It may just as well occur during the marriage or several years after its dissolution.
How is this possible? To explain this, it is worth starting with the fact that there are two possible marital property regimes:
In order to carry out a division of joint property, first there must be a statutory community of property between you, and then this community must come to an end. This happens, among other things, upon divorce. In certain situations, however, you may seek the termination of the community of property with retroactive effect. Such a decision may be issued only by a court, and only after you demonstrate that there were important reasons for such a ruling. Such an “important reason” may be, for example, the spouses living separately, lack of influence over the other person’s financial decisions, or an addiction generating expenses.
You can read an entire separate blog post devoted mainly to this issue in the context of the division of property after divorce. In order not to repeat the same information, for the purposes of this text we can, in simplified terms, assume that what you acquired during the marriage constitutes your joint property.
The law does provide for certain exceptions (e.g. inheritance and gifts, which form part of personal property). Nevertheless, it can be assumed that the vast majority of assets accumulated after the wedding will be included in the spouses’ joint estate.
When dividing property, the most emotions are always stirred by the most valuable components, primarily real estate. An apartment or a house after divorce may be divided in several ways. But is any form of division always possible?
Not necessarily. Sometimes the property belongs exclusively to one spouse – for example, if it was acquired before the marriage. In such a situation, after the divorce the house or apartment will belong only to that person, and the other party cannot claim any rights to it.
A similar situation arises when a house is built on land owned by only one spouse. Under Polish law, whatever is built on land belongs to the owner of that land. As a result, such a house constitutes part of the personal property of one spouse, rather than joint property – even if both spouses invested significant amounts of money in its construction. In such a case, the spouse who does not own the land may at most seek reimbursement of contributions and expenses incurred for the other party’s personal property. More on this can be found later in the article.
If, however, you have equal rights to the property and it forms part of the joint estate, there are three ways to divide it:
It is often said that “a loan binds more strongly than marriage.” Although said jokingly, this statement has much in common with reality. The division of joint property of former spouses has no effect on the loan or its repayment.
The court will not decide who is to repay the loan, even if it awards the property to only one spouse with an obligation to pay the other. For the bank, people who have taken out a loan together are simply co-debtors. The division of joint property or even a divorce does not change this.
As former spouses, however, you may try to have the loan transferred to one person – usually the one who becomes the sole owner of the property. It should be noted, however, that this is not easy. The bank will verify whether the person to whom the obligation is to be transferred will be able to repay the loan independently. If the bank finds the situation uncertain, it may refuse to amend the contract.
You already know that after a divorce the community of property between you and your former spouse ceases to exist. However, this is only the first step toward organizing your financial situation. It is still necessary to allocate to each of you property corresponding to your respective shares.
It is generally assumed that the shares in the property subject to division are equal – each of you is entitled to the equivalent of one half of the joint property. There are, however, exceptions to this rule. In special circumstances, you may seek the determination of unequal shares, as well as the reimbursement of contributions and expenses incurred in relation to joint property.
Spouses may request the determination of unequal shares only for important reasons. Unfortunately, the law does not precisely define what such “important reasons” are.
Taking into account the position of the Supreme Court, it may be assumed that this refers to the totality of circumstances indicating that an equal division of property would be unjust from a moral and ethical standpoint. An example could be a situation in which one spouse works hard and financially supports the entire family, while the other squanders the property – for example, due to alcoholism.
However, a justified reason will not be the mere fact that one of you earns less, even if the difference in income is significant. What matters is not only how much you earn, but also how you contribute to running the household, raising children, and so on.
An unequal division of property after divorce is possible only when both conditions are met simultaneously: the spouses contributed to the creation of the property to an unequal extent, and making an unequal division is justified by important reasons.
You have much greater room for maneuver when it comes to the reimbursement of contributions. This term refers to expenses incurred to maintain, use, or improve an existing asset, such as renovating a house. Each spouse should reimburse expenditures and contributions made from joint property toward their personal property. A spouse may also demand reimbursement of expenses incurred from personal property toward joint property.
For example, suppose you invested joint property in building a house on land owned solely by one of you. In that case, contributions were made from joint property to the personal property (the land) of one spouse. You may therefore demand that these contributions be settled in the course of dividing joint property. A similar situation would arise if the land were purchased jointly, but one spouse invested their personal funds (e.g. inherited money) in building the house.
The settlement of contributions and expenses at the time of dividing property may therefore result in the final amounts received by each of you, or the value of the items distributed between you, being unequal. However, in order to settle contributions, you must have supporting evidence – for example, proof that a renovation actually took place and that the funds used formed part of personal property.
The division of spouses’ property may take place before a court or before a notary.
A court may divide property in two ways – in separate proceedings or as part of the divorce case itself.
As you can see, the issue of property division is more complicated than it may seem. You must decide whether you want to divide the property at all (you are not obliged to do so and may postpone the decision for many years), choose the appropriate method of division, and decide whether you prefer court proceedings or a notarial division. In many cases, legal assistance will therefore be necessary – especially if it is difficult for you to reach an agreement with the other party or if you need to gather extensive evidence. It is, however, worth ensuring that the property division proceeds in line with your expectations, as your financial future largely depends on it.
When is an unequal division of property possible?
An unequal division of property is possible only when two conditions are met simultaneously: there are important reasons justifying it, and the spouses contributed to the creation of the property to an unequal extent. An unequal division can be carried out only before a court, which decides whether the shares of the former spouses should indeed differ from one half each.
How much time is there to divide joint property?
In fact, former spouses are not obliged to divide their joint property at all. They may therefore postpone this decision for many years after the divorce, or in extreme cases, never settle their financial matters. For personal comfort and security, however, it is worth carrying out the division as soon as possible.
Repayment of a loan after divorce and property division – how does it work in practice?
From the bank’s point of view, it does not matter whether the people who took out the loan are still married. They remain co-debtors, and to change this situation it is necessary to reach an agreement with the bank. The bank may, however, refuse to amend the contract and make only one of the former spouses solely liable if it is not convinced that this person will be able to repay the debt independently.
How to carry out an amicable division of property after divorce?
The division of property after divorce does not have to mean a long court dispute. If the spouses agree on the method of division, they may do so before a notary or request that the division be carried out as part of the divorce proceedings, without initiating separate proceedings to settle their property matters.
