For a long time we have been working on the development of the Financial Strength. We can just boast about the results. We managed to establish cooperation with the “Law Office of the Legal Council – Krzysztof Westfal”.
Together we will try to prepare texts for our new cycle – law and finance. A good start is to find out what the distribution of assets is like in practice. We will not leave you with legal definitions alone in the article you will also find an example of “taken from life”. As you will see, the distribution of wealth is not always easy…
The creation of joint property between the spouses.
According to Article 31 ยง1 of the Family and Guardianship Code[1], a joint property of the spouses shall arise by virtue of the Act itself as soon as a marriage has been entered into. In practice, this means the creation of three de facto property assets – a property covered by the joint law and the personal property of each spouse. As a rule, such assets are not separated in any way, and the individual components of separate assets constitute a functional whole of the economy. The actual separation and settlement of these components takes place only after the liquidation of the joint property – most often in the case of divorce of the spouses. In practice, there is often a problem as to which assets form part of a joint property regime and which of them form part of each spouse’s separate personal property regimes.
Methods of distributing the common property
As soon as the divorce judgment becomes final, the joint property of the spouses ceases to exist. However, this does not necessarily mean that the objects previously covered by the common property are in fact divided between the spouses. In the majority of cases, once the divorce judgment becomes final, the joint property changes into joint ownership in fractions.
The joint property may be distributed on the basis of a consensual agreement between the spouses or a court decision.
It should be noted at the outset that, pursuant to Article 58(3) of the Family and Guardianship Code, a court pronouncing a divorce may, at the request of one of the spouses, divide the joint property in the judgment pronouncing the divorce if the implementation of such a division does not cause “excessive delay in the proceedings”. As can be seen, there is no guarantee that the District Court deciding on the divorce will undertake the division of the joint property – it is up to the court alone to cause undue delay in the proceedings by the division of the property.
Where the joint property is not distributed in the context of divorce proceedings, a separate court procedure will have to be conducted on this matter. A motion to initiate non-procedural proceedings should be submitted to the relevant civil department of the District Court competent for the location of the property. Such an application should include, inter alia, the identification of the parties, the determination of the value of the property to be divided, a request as to the manner of division and the reasons for the application, as well as the citation of evidence in the case. The application must also be accompanied by a document showing the cessation of joint property ownership – in our case the judgment pronouncing the divorce and information whether the parties have attempted mediation or other amicable settlement of the dispute. The composition of the property is determined, pursuant to Article 684 in conjunction with Article 567, paragraph 3 of the C.C.P.[2], by the court of its own motion as at the date of the cessation of the joint property, and its value is determined at market prices as at the date of the division of the property.
Another solution is to make a contractual division of the common property. Such a solution is more advantageous for both parties in a situation where there is no dispute over the division of assets between them and they are able to reach an agreement on the matter themselves. In practice, this means that the relevant contract is drawn up in any form whatsoever, although there are exceptions to this rule. The conclusion of such an agreement in the form of a notarial deed is required in the case when the joint property includes real estate, the right of perpetual usufruct or any other right, the transfer of which requires the form of a notarial deed. In a situation where the assets include a company, the spouses should conclude a written agreement with notarized signatures.
The Law Firm is currently dealing with a number of asset division cases. One of the most interesting things we are currently doing is in the following case. The property comprises, among others, a residential unit in A and a property encumbered with a capped mortgage located in B. It is mainly these two assets that are the subject of litigation in court. The ex-wife requested the division of the estate as follows: The applicant would receive a mortgaged property as a result of the division, while the Participant (former husband) would receive a residential unit located in locality A. In addition, the Applicant demanded repayment of USD 50 thousand as half of the value of the premises to be provided to the former husband. In the application, the former spouse claimed that the value of the mortgages