Getting divorced? It needn‘t be a ’world war‘, but it is important that a professional experienced in dividing up property accompany you in the process. Don’t hesitate to contact the firm of Avivit Moskovich – attorney and N.P. today. The firm specializes in legally representing and accompanying divorcing parties, including cases that require creative and sophisticated solutions and resourcefulness.

Dividing up property between the spouses

Dividing up property between divorcing couples is one of the most complex, sensitive, and momentous issues in a divorce; in fact, it defines the financial futures of each side.

The method used in dividing up property in Israel depends on the date of the couple’s marriage.

The legal nature of joint ownership

If the couple has married prior to January 1, 1974 (the effective date of the Property Relations between Spouses Law), the spouses are bound by the law relating to joint ownership which states that all property and assets acquired during the marriage, irrespective of how it is registered, belongs to both spouses on account of their joint efforts.

Such a case involves immediate proprietary joint ownership.  During the course of the marriage the spouses acquire the proprietary right to the property itself; therefore each can demand his/her share at any time.  Joint ownership applies to all rights and property, including business assets.

The Property Relations between Spouses Law

For couples that have married since Jan. 1, 1974, the provisions of the Property Relations Law shall apply.  In other words all property accumulated from the day of their marriage up until the date of their split shall belong to both sides in equal portions.  

Naturally this is assuming the sides have not signed a property relations agreement, while still married, stipulating otherwise.

We shall review a number of differences between the nature of joint ownership, for couples that have married before Jan. 1, 1974, and the Property Relations Law that applies to couples married after Jan. 1, 1974.

In contrast with joint ownership, in which each spouse can claim his/her portion of property, for couples married after the effective date of the Property Relations between Spouses Law, there is a delayed balancing of resources.  In other words a spouse can demand his/her portion only in the event that the marriage is nullified due to divorce or death.

According to the Property Relations between Spouses Law – all property accumulated during the course of the marriage is divided equally between the spouses; however all property originating from before the marriage and/or benefits paid as a result of corporal damage and/or property received as a gift or inheritance belongs to the spouse who brought the property into the marriage, unless otherwise agreed upon.

Indeed, according to the Property Relations between Spouses Law, ownership of property obtained by a spouse prior to the marriage is rightfully that spouse’s; however a change might be made in this rule in the future.

A number of examples:

Today one finds in the record of legal rulings that:  Despite a woman bringing an apartment that she owns into the marriage while the couple upgrades the property (renovations funded by joint monies or a mortgage backed by joint monies), the courts have ruled that each spouse is to be compensated for all monies he/she has contributed to improving/financing the property; furthermore, in certain cases of material participation, the courts have even ruled that the property is jointly owned.

We have also witnessed rulings in which joint ownership has been applied at the same time as the Property Relations between Spouses Law.  In other words the court has the power (and we have seen it do so) to apply the couple’s intention to share property on all monies acquired before the marriage.  Stated otherwise, the court assesses the evidence and if it is convinced that the sides intended the property to be jointly owned—despite being acquired prior to the marriage—it will rule the property as being jointly owned.

Attorney Avivit Moskovich explains division of property in a divorce

Listing the property in the name of one of the spouses

We must stress that the fact that all property is listed in the name of one of the spouses does not deny half-ownership of the property by the other spouse.  Based on legal precedent, the property’s listing is not the crux of the matter.    

Still, in such a situation one should consider requesting interim measures in the form of confiscation or injunctions.  This is because the risk that the spouse under whose name the property is listed might sell the property, without the other spouse’s knowledge, is high.

Spouses’ residential apartment

In the case of an apartment there are two conventional solutions for divorcing couples:

  1. Selling the apartment, repaying the mortgage, and dividing up the remaining proceeds.

  2. One of the spouses purchases the apartment from the other: One of the spouses purchases the share of his/her spouse using his/her own share of other joint assets, or by taking out an additional mortgage and transferring the existing mortgage on his/her name.  In such a case it is important to make certain the bank releases the spouses and his/her guarantors from all liability pertaining to the mortgage.

It is important to note that as far as the apartment is concerned, the Immovables Act grants the court the authority to instruct a delay in the apartment’s sale so long as there is no proven alternative housing arrangement for the couple’s children (or the spouse) that suits their needs.

Rights of a spouse to half of the retirement assets of the other spouse

Provident funds, pension funds, senior employees’ insurance, reputation—the value of these assets is spit between both spouses, without distinguishing between the spouse who actually accumulated them and the spouse who contribute to the family otherwise.

Debts

Debts originating during the course of the couple’s married life, or from the purchase of a joint asset, or connected to a joint asset, are to be shared between the two.  If one of the spouses owes a specific sum to a third party, both spouses share that debt in equal portions in the framework of their internal relationship—without granting the third party the right to sue the non-debtor spouse.

For example, if the husband takes out a loan from the bank, the bank cannot sue the wife.  This is because the shared debt applies only to the spouses’ internal relationship and is not meant to grant any right to an external creditor.  A non-shared debt is a debt that has arisen after the spouses’ separation, or because a spouse was not a party to the debt’s creation (for example tax evasion).

Division of property is an action that demands a high degree of sensitivity.  Since a divorce proceeding is in any case an emotion-filled process, it is important that the attorney know how to accompany the client to the optimal outcome.  In numerous cases dividing property is not a ‘black and white’ affair; for this reason creative thinking on the part of the attorney is a highly significant asset.  The attorney must know how to achieve an optimal arrangement that is satisfactory to both sides via an agreeable compromise; however, in the event that circumstances dictate toughness and sticking to one’s principles, the attorney must be fully competent in this regard too.

It is important to bear in mind that the only property that is divided consists of known property.  Hiring a private investigator of financial affairs is recommended in all cases of suspicion.  Additionally, demanding that a spouse specify all of his/her known assets in a formal declaration, and that the declaration be part of the divorce agreement, grants the right to sue for one-half of all undisclosed property discovered thereafter.