Division of property during a divorce or separation
Division of property is handled differently depending on whether you and your partner are married or cohabiting. Read the section on division of property if you are married or division of property if you are cohabiting below.
DIVISION OF PROPERTY IF YOU ARE MARRIED
Divorce – what is the process?
When two people who are married no longer want to be together, one or both spouses can apply for a divorce in the district court. It is not necessary to specify a reason for the divorce. If there are children under 16 living at home, the spouses are automatically required to undergo a reflection period of 6 months before the district court will give them a judgement of divorce. This same applies if only one of the parties wants a divorce.
What is marital property?
When two people get married, it generally means that the property the spouses own becomes marital property. The exception is property deemed to be separate property through prenuptial agreement, gift or inheritance. During the marriage, marital property does not play a significant role since each spouse owns and manages their own property and is responsible for their own debts.
It is when property is being divided during a divorce that the right the spouses have to each other’s property (i.e. the marital property) becomes an issue. During division of property, a spouse is entitled to half of the other spouse’s marital property, after a deduction for debts.
When does division of property take place?
Division of property between spouses takes place on three occasions:
- During a divorce
- If one of the spouses dies
- If the spouses assign or change property ownership conditions through an agreement during the marriage
If the parties cannot reach an agreement on how to divide the assets, you can apply to the district court for a property division executor, who will be paid by both parties jointly. The request for division of property during a divorce does not have to be made within a certain time limit, but if a spouse waits too long (10–20 years) without good reason, the right to this may be lost.
Right to transfer of ownership of the home
When dividing marital/cohabitee property, the party most in need of the shared home is given the right to this property in settlement of their share.
A shared home that is separate property will not be included in division of property. However, in some cases the spouse/cohabitee who does not own the home may still have the right to continue living in it. For transfer of ownership of a home that is not marital property/cohabitee property, one requirement is that the person can demonstrate greater need. If the couple does not have any children together, there must be strong reasons for transfer to take place.
Since the value of the home is not included in the division of property, the party shown to have a greater right to the home must buy out the other party. This can be done by waiving the right to certain property in the division of property or by cash payment.
Contact a lawyer for more information about your division of property. You can also contact Ada’s legal helpline for some initial advice.
DIVISION OF PROPERTY IF YOU ARE COHABITEES
When are you cohabitees in a legal sense?
The Cohabitees Act contains provisions governing situations during a cohabitee relationship, after a separation, and after the death of one of the partners. The Cohabitees Act may be helpful in some cases, but if you can agree on how to divide up the property when separating there is no need to apply the law. You can instead draw up a cohabitee agreement, for example. For the regulations of the Cohabitees Act to apply, the couple must live together on a permanent basis as a couple and have a joint household. Thus, the Act does not apply to two friends or siblings who live together. When assessing whether two individuals are cohabitees under the Cohabitees Act, you look at aspects like how long the individuals have lived together, with the benchmark being at least six months. Another indicator of a cohabitee relationship is that the individuals are registered at the same address. If you live together and have a child together, you can presume that the relationship is defined as a cohabitee relationship.
When does a cohabitee relationship end?
A cohabitee relationship can end in different ways. The different cases addressed in the Cohabitees Act are:
- the cohabitees get married
- one of the cohabitees dies
- the cohabitees separate
Division of property – when and how?
When cohabitees separate, each cohabitee has an independent right to request division of property and the other cohabitee is obliged to participate. You can request division of property by telling the other cohabitee that you want the division of property. If no agreement can be reached, either cohabitee can submit a request to the district court to have a property division executor assigned. The role of the property division executor is to divide the cohabitee property between the two parties. A cohabitee must request division of property within one year of the end of the cohabitee relationship. If division of property is carried out because one of the cohabitees has died, then division of property must be requested by no later than the date of estate inventorying. After this deadline, the division of property rules laid out in the Cohabitees Act no longer apply.
How is the property divided upon separation?
Cohabitees can also request division of property upon separation, but the rules that apply differ depending on whether you are married or cohabiting. One difference is that cohabitees have more limitations regarding what property is included in a division of property.
The property included in the division of property for cohabitees is dependent on both WHEN the property was purchased and what TYPE of property it is. Only property that is defined as cohabitee property is included in the division of property. Other property is not included. If property is not included in the division of property, then the value of that property is not divided between the cohabitees. The item then remains the sole property of the cohabitee who owns it.
As a cohabitee, you may be entitled to transfer of ownership of the shared home. Read more about this above under the heading “Right to transfer of ownership of the home”.
Contact a lawyer for more information about your division of property. You can also contact Ada’s legal helpline for some initial advice.