Property Relations Between Spouses Law

The Property Relations law governs the division of joint property when a couple separates in Israel. During marriage life many couples accumulate property together and individually, and use their funds to cover expenses and accumulate savings. When separating, many couples are confused and bewildered. The legal criteria in Israel according to to which the property will be divided between the couple may seem obscure. The following article presents the basic principles of how the property acquired by the couple will be divided according to Israeli law.

Who does the Property Relations law apply to?

Assets of spouses who married (or started cohabiting) after January 1^st, 1974 will be divided according to Property Relations between Spouses Law (חוק יחסי ממון בין בני זוג) 1973.

The Property relations law is dispositive. This means that the spouses can agree on a different arrangement for dividing their financial assets. Therefore, if the spouses have signed a prenuptial agreement stating how their assets are to be divided throughout their marriage, they will not be governed by the Property Relations Law.

Otherwise, in cases where there is no prenuptial agreement or when said agreement does not vary from the Property Relations Law, the spouses will have to divide their assets and property according the law’s provisions.

Note that the law only applies to couples who resided in Israel at the time of their marriage.

How is the Spouse’s Property affected by the Property Relations law?

Throughout their marriage relationship, a married couple accumulates assets from different sources. The Property Relations Law defines the methods we use in order to establish ownership over these assets during the course of the marriage.

The law stipulates that the marriage does not infringe on each spouse’s right to property. Therefore, during their marriage, any asset owned by one of the spouses belongs to them alone.

For example, the salary earned by one spouse may be deposited in their private bank account. Said salary, belongs to the spouse that earned the money. Each spouse has the full right to use their property in any way they see fit, even without the consent of the other spouse.

How is the Spouse’s Property divided upon divorce?

At the point where the marriage is terminated (or during the period before the divorce) the spouse’s assets will go through the process of balancing of resources. At the end of this process each spouse will be entitled to half (50%) of the couple’s assets.

How does the balancing of resources process work?

We calculate the total value of the assets held by each spouse and compare the two values. If there is a difference between both values, the party with a higher asset value must transfer half of the difference to the other party. Entitlement to half of the joint assets includes future income such as pension funds and other sorts of savings.

Note that certain assets are excluded from the Balancing Process; such as premarital owned assets, gifts received during marriage and inheritance gained during marriage.

Contact us – Israeli lawyers

In order to fully understand the dividing of mutual and individual assets we strongly advise to consult with our legal team. We’ll be happy to arrange a consultation at our Jerusalem or Tel Aviv law office.