In the first part of the blog series – Divorce in Finland – we discussed how to initiate divorce proceeding, in the second part we discussed what the process is when you have children with your spouse and in the third part we discussed how you can protect your assets before filing for a divorce. At this fourth part we will tell how is our matrimonial property divided.
Please note that these posts are written on a very basic, general level. Should you need more specific help in your specific situation, you may contact Sanna Svahn by e-mail or make an appointment with her.
Part 1: Divorce in Finland – 6 things to take into account
Part 2: Divorce in Finland – What happens when you have children?
Part 3: Divorce in Finland – How can I protect my assets before filing for a divorce?
Part 4: Divorce in Finland – How is our matrimonial property divided?
Having read about Melinda and Bill Gates’s recent divorce in the papers, we thought a refresher on how to protect your assets under Finnish law before filing for divorce might be necessary. The following simple steps can help you get organised and prevent you from losing significant amounts of assets in the unfortunate case of a divorce.
How is our matrimonial property divided?
When proceedings relating to divorce are pending or when the marriage has been dissolved, a distribution of matrimonial property shall be carried out if a spouse so demands. (Ositus)
If neither spouse has a marital right to the property of the other spouse, a separation of the property of the spouses shall be carried out instead of the distribution. (Erottelu)
If the spouses have joint property, the said property shall be divided upon request when the matrimonial property is being distributed or the property of the spouses separated. (Yhteisen omaisuuden jakaminen)
If, in the separation of the property of the spouses, the circumstances do not indicate and it cannot be proved which spouse a movable object belongs to or that it is joint property, the spouses shall be deemed to have acquired it jointly and with equal rights.
Otherwise the assets and liabilities are listed based on the registered ownership and relative share in them.
We often recommend that the distribution or the separation should be completed as soon as possible to avoid any future problems with the delays – especially if one party dies before completion of the process.
1. Listing of assets
In each of the above cases, the starting point is drawing up a list of assets and liabilities based on the date when the divorce was petitioned. This means that each party draws up a list including assets and liabilities to which marital rights exist and those assets and liabilities to which the rights do not extend to.
This is not a compulsory phase unless either spouse or both spouses demand such a list to be drawn up. It is, however, the only way to ascertain the net value of each spouse’s share.
It is also the only way to ascertain that both spouses have truthfully listed and appropriately valued their assets and liabilities. If a list is drawn and it later becomes evident that the other spouse has concealed some of his/her assets, such a party may be charged with fraud.
The list is not, however, filed at a court as it is required in many other countries. The list is merely part of the Agreement and both spouses confirm the list to be true and accurate by signing the Agreement.
2. Valuation of assets
If the assets are listed, both parties then value their assets and liabilities.
If no list is drawn up, the spouses may merely specify in a Distribution Agreement (Ositussopimus) the net value of each party’s assets, the combined net value of the assets of both parties, which party is poorer and then what is the value (if any) to be paid in cash or in matrimonial property to such a party. The tax authorities may however, impose excessive taxes due to insufficient calculations.
Bank accounts and debts are valued based on the day when the divorce was petitioned. All other assets are valued on the value close to the distribution date.
As a starting point, both parties keep the assets and liabilities that they owned during the marriage. They can, however, swap matrimonial assets between themselves if they wish to do so. The objective is to distribute the assets and liabilities in a way that leaves each party with an equal share (in value), and that no assets remain in joint ownership.
Often this means, for example when the property cannot otherwise be equally divided, that the party who keeps or gets more property in the distribution pays the other party the difference with a bank loan or other external funds.
4. Court appointed Distributor
If no agreement is reached between the spouses themselves, even with the help of attorneys, then either or both parties can apply for a Distributor to be appointed by the courts.
The distributor then has the authority to conclude the distribution, even despite the unwillingness of the other party (or both) to cooperate.
The decision finalized by a Distributor can be appealed in court.
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