Matrimonial property, marital property community property. What is it? And what happens happens with the common assets after divorce? Or after the death of one spouse? What are the rules for the division of the marital property? And what to watch out for?
Settlement of the marital property is a key step that follows a divorce or the death of a spouse. This process can be stressful and confusing for many - which is why it's important to know what rules apply, how the settlement works, and how you can make things easier for yourself by following the right legal procedure.
In this article, we will explain the basic rules of the marital property division and settlement, the possibilities of property division, the role of the agreement between the spouses, and what to do if spouses do not reach an agreement.
What is Marital Property?
The marital property is created automatically at the moment of the conclusion of marriage, unless the spouses agree on a different regime by contract. Marital property usually includes:
- Income of both spouses (wages, remuneration, earnings from business, etc.)
- Assets acquired during the marriage (real estate, cars, household goods)
- Debts incurred during the marriage (e.g. loans, credits)
Marital property does not include property acquired by only one spouse by gift, inheritance or from the sole ownership of one spouse.
When does marital property cease to exist?
Marital property ceases upon dissolution of the marriage; it may terminate or be reduced in the following cases:
- Divorce
- By the death of one of the spouses
- Court decision on the reduction or dissolution of marital property during the marriage
In all cases, the property relations between the spouses (or one of them and the late spouse's heirs) must be divided and settled. The settlement shall be carried out even if the existing scope of the marital property is reduced.
What does it mean: settlement of marital property? The settlement of marital property consists of the liquidation of the previously shared obligations and rights by settling them.
How does marital property that is dissolved (but not yet settled) work? It works just like existing marital property until it is settled.
How is Marital Property Settled?
There are three basic settlement methods:
- Agreement Between Spouses:
The fastest and least conflictual form. The agreement can be made in writing or orally – but beware, written form is mandatory if the settlement concerns, for example, real estate or if the agreement was concluded during the marriage. - Court Decision:
If the spouses cannot reach an agreement, either of them may file a lawsuit for the settlement of joint marital property. The court will decide based on legal rules. The usual starting point is an equal share of assets and debts. The court will divide ownership rights to specific items of the joint property and will order the spouse who receives property of higher value to pay the other spouse a settlement share (the court will calculate the amount). The court will also consider the extent to which each spouse contributed to acquiring the property, as well as how each cared for the family (children) and household.
- Zákonná domněnka po 3 letech:
Pokud nedojde k dohodě ani k podání žaloby do tří let od zániku SJM, nastupuje tzv. zákonná domněnka vypořádání:
- Hmotné movité věci (např. nábytek, spotřebiče) připadnou tomu, kdo je výlučně užívá.
- Ostatní majetek (včetně nemovitostí) se stává podílovým spoluvlastnictvím s rovnými podíly manželů.
- Dluhy a pohledávky jsou společné, podíly obou manželů jsou stejné.
- Hmotné movité věci (např. nábytek, spotřebiče) připadnou tomu, kdo je výlučně užívá.
What to Look Out for when Settling?
✅ 3 Years Deadline
Many people are unaware that if the settlement is not completed within 3 years of divorce (or death), the statutory presumption automatically applies. This can be disadvantageous in many cases – especially when the property is complex, linked to a business, or there are hidden debts.
❗Attention: In the case of real estate, it is necessary not only to conclude a settlement agreement within the 3-year period but also to register the agreement in the Land Register (The agreement on the settlement of real estate becomes effective only upon its registration in the Land Register).
✅ Third Party Rights
The settlement of joint marital property must not affect the rights of third parties – typically creditors or co-owners. A mutual agreement between spouses cannot be used to eliminate a joint debt to a bank or a loan guarantee.
✅ Form of Agreement
The settlement agreement must be in writing if required by the nature of the property. In the case of real estate, the agreement must also be registered in the Land Register.
✅ Effects of the Agreement
Even if the spouses reach an agreement later, the agreement has retroactive effect to the date of dissolution or narrowing of the joint marital property. This can have a significant impact on tax and property relations.
Settlement of Marital Property after the Death of a Spouse
After the death of one spouse, the joint marital property is settled first, and only then is the inheritance process addressed. This means that half of the couple’s property is first “separated” and belongs to the surviving spouse, while the other half becomes part of the inheritance proceedings. The heirs of the deceased spouse may also conclude a settlement agreement with the surviving spouse.
The surviving spouse is also the legal heir and inherits together with the deceased's children in the first class of succession. This rule can be changed e.g. by a will.
How can Attorney At Law Help you?
Legal assistance is often crucial in marital property settlement, especially:
- When planning property settlement during the marriage
- If the property is extensive, includes real estate or a business
- If one spouse is hiding assets or concealing debts
- When spouses fail to reach an agreement and litigation becomes likely
Our law firm has wide experience in out-of-court agreements and court settlements of marital property. We can help you protect your assets, negotiate fair terms and resolve the situation quickly and with as little stress as possible.
Do you need legal help with marital property settlement? Contact our law firm. Together we will find the best solution for you.
