Property dispute between spouses

When a couple seeks to go their separate ways, one of the main issues is how will the communal property accumulated during the marriage be divided?

Section 5 of the Law on Financial Relations between Spouses determines that the assets accumulated during the marriage period will be equally divided between the parties at the time of dissolvent of the marriage, and that assets accrued prior to the marriage date, as well as gifts and inheritances received during the marriage period, will not be taken into consideration as mutual property.

This seems to be a clear and simple arrangement, but Section 8 of the Financial Relations Law allows Family Court to exclude assets that were accumulated during the marriage, or to determine that the prperty accumulated during the marrige will not be equally divided (taking into consideration the earning capacity of the parties and other variables), and ruling has expanded and determined that assets acquired before marriage, Gifts and inheritances will, in some cases, be divided between the parties.

In addition, the case law has acknowledged ¬†intangible assets such as personal and business reputation and / or earning capacity as “balanceable assets”, making the simple question, “How do you divide the cake?” To a much more complex question: “What does the cake consist of?”

Confused? Rightly so.

In view of the existing chaos, it is paramount to present the facts before the judicial court that deals with the case (and even before that – in the selection of the judicial court that hear the case, since in Israel there are parallel authorities Family Court and the Rabbinical Court), to make sure that what does not need to go into the balanceable assets, stays out of it, and on the other hand, that joint assets will not be “smuggled” out of the balanceable assets list.

When it comes to unmarried couples, it must first be proved that the parties were “common law spouses”, and then there is another obstacle, namely, proof of intention to share in a specific property (as the Law on Financial Relations between Spouses does not apply on common law spouses in Israel).

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