The Netherlands is currently one of the few countries in the world that has an absolute community of property regime upon marriage. Unless parties have expressly agreed otherwise, all property, whether acquired before or after marriage, automatically becomes communally owned by both spouses. Upon divorce both parties are entitled to 50% of the marital property. Parties may deviate from this principle when agreeing a divorce settlement. However, if the divorce is contested, a court will hold fast to the equal division of property.
One of the main arguments in favour of this system is that (in theory at least) it is easy to divide the marital property upon divorce and both parties always receive an equal share. The system is transparent, but in some cases can lead to unequitable results. For example, if one of the spouses contracts certain debts without the knowledge of the other spouse, the other may still liable of the debt after divorce even though they may never have benefitted from the original debts.
The only way to avoid marrying in community of property in The Netherlands is to conclude a prenuptial agreement before a notary public. If, for example, one of the spouses owns their own business, this will protect the other spouse from automatically becoming liable for any debts incurred through the business. Postnuptial agreements can also be concluded after marriage, but in that case you will have to divide the community of property first.
The most common form of prenuptial agreement involves creating only a partial community of property for certain goods, such as the marital home and contents thereof. All other property is deemed to be privately owned by the spouse that acquired said property. Some prenuptial agreements exclude any communal property, but may or may not contain certain clauses to mitigate the effects of this for the spouse with the lesser income or property. The agreement may either contain an annual setoff clause, requiring the spouses to compensate each other at the end of each year, or there may be a setoff clause requiring the spouses to compensate each other upon divorce. In both cases, conflicts can arise during the divorce proceedings regarding which income or property must be involved in the annual or final settlement.
Advising both national and foreign clients concerning the impact of divorce forms part of our daily practice. We can advise you on the consequences of your marital regime and the status of any prenuptial agreement. We specalise in advising business owners, entrepreneurs and professionals about the consequences of a divorce and minimising the effects of such on their business.
Information
For additional information please feel free to contact our office 0031 10 209 2777, or by e-mail info@lvh-advocaten.nl
