Division of property according to law – critical date, debts, valuation and administrator
In a division of property, several legal issues must be kept separate: which day determines the basis for the division of property, which assets constitute marital property, how debts are to be covered, how assets are valued, and how a dispute is resolved if the spouses do not agree.
The critical day – which assets and debts belong to the division of property?
In the event of a divorce, the division of property is based on the financial circumstances on the day the petition for divorce was filed. This is the critical point in time according to Chapter 9, Section 2 of the Marriage Code.
This does not mean that the actual division of property must be completed by that day. The rule primarily determines the state of assets and debts that will form the basis of the division of property. The spouses are subsequently obligated to report any changes until the division of property is performed.
Marital property is the main rule – but not the same as co-ownership
A spouse's property is marital property to the extent that it is not separate property. This does not mean that, during the marriage, the other spouse owns half of every asset. Each spouse may own their own property, while the net value of the marital property can later be included in the division of property.
Which property is separate?
Separate property can arise through, among other things:
- a prenuptial agreement,
- a gift from someone other than the spouse with a condition of separate property,
- a will with such a condition,
- an inheritance where the testator has stipulated separate property in a will, or
- what has replaced such property, depending on the conditions.
Income from separate property is not automatically separate in all situations; the condition and Chapter 7, Section 2 must be checked.
How do debts affect the division of property?
First, each spouse's share is calculated. From a spouse's marital property, debt coverage is deducted according to Chapter 11, Section 2. Debts that have a specific connection to separate property should not simply be charged against the marital property in the same way as other debts.
After debt coverage, the remaining net marital property is added together and, as a main rule, divided equally according to Chapter 11, Section 3.
Can the result be adjusted?
Yes. Chapter 12 contains adjustment rules. In cases of unreasonableness, with regard in particular to the length of the marriage but also to the spouses' financial circumstances and other circumstances, a spouse may in certain cases be allowed to retain more of their marital property than a strict equal division would entail.
This is an assessment in each individual case and should not be reduced to a simple standard rule for "short marriages."
How should homes and other assets be valued?
The Marriage Code's critical day determines which assets are included, but the valuation needs to be handled as a separate issue. For homes, a current estimated market value is often used as a basis. For companies, unlisted shares, and other assets that are difficult to value, expert valuation may be needed.
If the parties deduct projected sales costs or latent tax, it should be clearly stated how and why. Such adjustments should not be presented as an automatic statutory percentage.
Who gets the home itself?
The calculation of shares determines how much each person is entitled to in value. The allocation (lottläggning) determines which specific assets are assigned to each spouse's portion. The Marriage Code contains specific rules regarding the spouses' joint home and household goods, where need and reasonableness may be of significance.
The fact that one spouse receives the home in the division of property does not automatically mean that the bank releases the other from the mortgage. Loan liability must be resolved with the lender.
What happens if the spouses do not agree?
According to Chapter 17, Section 1, the court shall, upon the application of a spouse, appoint a mediator for the division of property if the spouses cannot agree. The mediator primarily attempts to get the parties to reach an agreement. If that fails, the mediator can rule on the issues necessary for the division of property and draw up the division of property deed.
Can a division of property performed by a mediator be challenged?
Yes. The Marriage Code has specific rules regarding the challenging of a division of property performed by a mediator. The time limit is short, and anyone wishing to challenge such a division of property should immediately check Chapter 17, Section 8 and seek legal advice.
Does a division of property deed need to be registered?
In the event of a divorce, registration with the Swedish Tax Agency (Skatteverket) is voluntary. The formal requirement between the spouses is that the division of property is documented in writing and signed by both of them. Registration should not be described as an authority's approval of the substantive correctness of the content.
Division of property during marriage
Spouses can also divide property during an ongoing marriage if they agree, but they must first submit a written notification to the Swedish Tax Agency. The division of property is based on the financial circumstances on the day the notification was made.
Five common legal errors in old division of property guides
- Writing that everything the spouses own is co-owned.
- Saying that all assets are divided without distinguishing between marital property and separate property.
- Using the separation day instead of the day the divorce petition was filed as the critical day.
- Claiming that registration with the Swedish Tax Agency is required for a divorce division of property.
- Confusing a mediator for property division (bodelningsförrättare) with an estate executor (boutredningsman) or the court's divorce judgment.
Read the process in Division of property agreements in the event of divorce – step by step.
Choose the right property division agreement
This guide primarily concerns division of property between married spouses under the Swedish Marriage Code. For former cohabitants, different rules apply to shared housing and household goods, and a request for division must normally be made within one year of separation. Read the guide for cohabitants and use the cohabitation property division agreement rather than an unchanged divorce agreement.
The Mallbutiken Division of property agreement in the event of divorce – Word/PDF costs 79 SEK and provides a structure for the written distribution.
Sources
Templates in this article
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