Friday, December 2, 2022

How Does an Inheritance Affect the Profit Sharing in The Marriage and After Divorce?

In the course of a marriage, assets can accumulate, such as endowment insurance, How Does an Inheritance Affect the Profit Sharing bank balances, automobiles, the company or practice of a spouse, real estate, etc. The assets can be acquired jointly, for example through the acquisition of joint ownership of a property. However, each spouse can create value in their own name only. An inheritance that a spouse receives in marriage also belongs to that spouse alone. How Does an Inheritance Affect the Profit Sharing As long as the spouses are married, there is no general right to equal participation in the acquisition of assets by the other spouse. This follows from the property regime of the community of gains, which states that the areas of property of the spouses remain fundamentally separate. The community of gains is only ended when the application for divorce is served. How Does an Inheritance Affect the Profit Sharing 

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Assets and Liabilities in Marriage

Gain is the increase in assets between assets at the time of marriage (initial assets) and assets when the application for divorce is served (final assets). In both cases, a distinction is made between assets and liabilities, i.e. debts are also considered in the profit balance. The gain made in the marriage must be determined separately for each spouse. The spouse who generated more wealth than the other during the marriage must pay half of the difference to the other as compensation.

The inheritance of a spouse in the marriage is to be added to his initial assets. If this is still available in the same amount when the application for divorce is served, it is neutral in value and does not increase the profit. In this case, an inheritance does not affect the profit sharing. The situation is different, however, if the inheritance experiences an increase in value during the marriage. Increases in value are to be compensated for. For example, whoever inherits a property during the marriage that experiences an increase in value during the marriage, this increase in value must be considered in the gain. It is irrelevant whether the increase in value occurs as a result of rising property prices or as a result of modernization measures. The increase in value is always a gain.

Example: The husband had no assets at the beginning of the marriage, but made an inheritance of $ 20,000.00 during the marriage. In this respect, his initial assets are $ 20,000.00. His final net worth is $ 60,000.00. With this he made a profit of $ 40,000.00. The wife did not bring any wealth into the marriage either, but inherited a property with a value of $ 200,000.00. When the application for divorce was delivered through divorce lawyer, the property had a value of $ 250,000.00, it had no further assets. Your gain is then $ 50,000.00. The difference between the gain of the spouse is $ 10,000.00. The wife has to compensate half of this amount to the husband because she has achieved a higher gain than he has in the marriage.

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If you want to avoid that inheritances are included in the balance sheet, there is the possibility of agreeing on a so-called modified gain adjustment. In this case, the inheritances are not considered for both the initial and final assets and thus play no role in the compensation of profits. In this case, the wife would have received $ 20,000.00 from the husband as compensation.

Spouse maintenance despite new partnership/forfeiture of maintenance

In family law practice, the question is often asked whether a new partnership leads to a loss of spousal maintenance claims.

The question is justified insofar as living together in a solidified community is the most common reason for forfeiting maintenance claims in practice. The maintenance debtor can no longer reasonably be expected to make further maintenance payments if the person entitled to maintenance lives in a stable cohabitation.

One speaks of a solidified cohabitation on the one hand with a cohabitation in a so-called maintenance community or on the other hand with a marriage-like community.

A maintenance community is to be affirmed if the person in need has a permanent social connection with a new partner, they work together and, for example, the household partner is financially supported by the other. In particular, the financing of the household or part of it as well as the apartment by the new partner, the purchase or construction of a joint home, a child that has emerged from the new relationship, living together with the children of both sides if the new partner has sufficient income for a joint household. The circumstances of the individual case are always decisive. The duration of the partnership is not important in this constellation.

Association in marriage & maintenance

On the other hand, a marriage-like union exists if the entitled person enters into a long-term relationship with a new partner and cohabitation out of wedlock has taken the place of marriage. A common household is usually an indication of a stable social community. However, in contrast to the maintenance community, it depends largely on the appearance in public. In this respect, a longer period of cohabitation is required for the cohabiting community. The case law has set a minimum duration of two to three years. While the economic situation of the new partner, in contrast to the maintenance community, does not play a role in the cohabiting community.

marriage & maintenance

If, on the other hand, the new partnership is not yet so solid that one can speak of a marriage-like relationship and there is also no maintenance community, living together with the new partner results in savings that reduce the maintenance requirement. The existing maintenance claim can be reduced by this saving.

It should therefore be checked regularly whether the maintenance due to forfeiture according to § 1579 No. 2 Civil Code is completely eliminated or a lower requirement affects the amount of the maintenance claim.

Current family law: Partial ineffectiveness of a marriage contract

The Higher Regional Court of Celle recently decided in a decision (Az 4 UF 44/18) on the partial ineffectiveness of a marriage contract with regard to a maintenance agreement. In a marriage contract it was agreed that after the divorce the wife should only receive childcare allowance for the care and care of a common child in the amount of the subsistence level.

The Higher Regional Court has ruled that a limitation of maintenance to the subsistence level is ineffective if the entitlement to care maintenance is limited to the subsistence level without compensation and if it was foreseeable at the time the contract was concluded that the occupational restriction due to childcare would only affect one spouse (the wife) would meet.

In the case to be decided, the ineffectiveness due to the severability clause did not include the entire contract, but only the limitation of maintenance to the subsistence level.

The entire marriage contract is only invalid in such cases if the marriage contract alone proves to be disadvantageous for one spouse overall and this is the result of an unequal negotiating position.

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