Assets of married and unmarried couples – how are they divided in the event of divorce?

 In this case, the legal regime of the couple’s assets becomes very important, which may be relevant for married couples and unmarried ones.

According to the State Data Agency, the annual number of divorced couples from 2013 to 2019 exceeded 8,000; from 2020 to 2022, it was a little more than 7,000. This indicates that the issue of the division of assets for cohabitating couples will continue to be a pressing concern in the years to come.

Liucija Jankoitė, a lawyer at CEE Attorneys, explains further: “For couples who decide to divorce, it is slightly easier to divide their assets if they have executed pre-nuptial (before marriage) or post-nuptial (after marriage) agreements. In this case, the parties can agree that any income or property one person earns belongs to them personally and cannot be claimed by the other spouse. The agreement may also stipulate that not only assets and income are personal, but also liabilities and debts. In this scenario, the agreement provides protection not only against possible dishonesty of the other spouse, but more importantly against the third parties, i.e. creditors” 

She adds that it is different if the spouses have not entered into a pre-nuptial or post-nuptial agreement, as the assets acquired during the marriage are considered joint property, which means that all the assets belong to both spouses. The spouses’ shares are then regarded as equal until proved to the contrary.

When is there a deviation from equal shares?

Where spouses do not have a pre-nuptial or post-nuptial agreement and the assets they have acquired are regarded as general joint property, the principle of equal shares can only be derogated from in exceptional cases. For example, in the interests of minor children, the health of one of the spouses or their financial circumstances.

According to Jankoitė, in the absence of a pre-nuptial or post-nuptial agreement, the assets acquired before the marriage are treated as each spouse’s personal property. In addition, assets given to each spouse personally or inherited by them after the marriage and personal effects such as footwear, clothing or professional tools belong to them personally. It includes resources needed for an individual business, the proceeds of damages for personal injury and targeted material support. For example, if one of them owned an apartment before the marriage, their apartment will continue to be their personal property during the marriage.

The lawyer indicates that there are several circumstances in which a spouse’s personal property can be recognised by the court as joint property.

Firstly, if it is determined that the property was improved during the marriage by the spouses’ joint resources or by the other spouse’s contribution and labour (such as major repairs, reconstruction, restructuring).

Secondly, if it is ascertained that joint resources were used to acquire the property, the amount of such funds exceeding the resources used is the spouse’s personal property.

What is considered a joint asset?

Property acquired by or in the name of both spouses or one of them after the marriage is established is considered joint property.

Jankoitė: “This can include spousal income (wages, salaries, dividends, pensions, allowances, other income – even from a spouse’s personal property or intellectual activity), companies, shares, private pension funds, and liabilities incurred during the marriage such as obligations and debts. It is worth noting that assets acquired by the spouses after the marriage will be considered their joint property, even if they are registered in one person’s name. The most common case here is a vehicle. A vehicle cannot be registered in the name of more than one person, so it always has a single “owner”. Only legally does it belong to both spouses”. 

All the income generated, such as rental income from an apartment, dividends from shares and salaries, are joint assets and belong to both spouses, regardless of how much they contributed to creating these assets.

For instance, if one spouse earns EUR 10,000 per month and the other EUR 1,000 per month, their combined income would be EUR 11,000.

Furthermore, even if one spouse has written a book or painted a picture, even if the intellectual rights to the object are personal to them, the proceeds of the realisation of the object will belong to both spouses.

How are assets acquired and divided out of wedlock?

The division of property is also an important matter for unmarried couples. Only if they live together without having registered an official marriage are their assets and property ownership subject to a completely different regime.

According to Jankoitė, individuals can buy property separately (as sole owners) or jointly, but if they do so collectively it will be treated as joint property. This means the property will be registered in both names but with a specific indication of which share belongs to whom. For instance, individuals with an equal share may buy an apartment, where the property will probably be registered equally between them. Of course, if one of the two individuals contributes a more significant amount to the purchase (e.g. pays 75% of the purchase), then it may be stated accordingly that they also own 75% of the purchase.

When couples are unmarried, each person’s income and debts are his or her own.

Fundamental differences between the division of assets in marriage and out of wedlock

The fundamental difference between the division of assets in marriage and outside wedlock is the possibility of owning and retaining personal property.

Jankoitė: “If unmarried couples dissolve their relationship, each individual is then left with their assets. This is unless a partner has invested their resources in the other partner’s personal property, in which case they have the right to seek compensation but must be able to prove the investment amount. Unlike in a marriage, if non-marital partners own property jointly it is legally divided, as each partner’s share of the purchase is clearly defined.” 

Jankoitė underlines that in the event of divorce and the absence of pre-nuptial or post-nuptial agreements, it is irrelevant who earned what during the marriage, how much and how expenses were divided. There is a presumption that all assets and debts acquired during the marriage are to be divided equally and that this rule is only deviated from in very exceptional cases.

Finally, in the case of divorce, the question often arises as to whether the children should also be considered when dividing the couple’s assets. There are cases where the spouse with whom the children live is of the opinion that the assets should be divided into three, four, etc., rather than two parts. The response is definite – the assets are to be divided only between the spouses, regardless of who the children are left with after the divorce. One of the spouses supports the children, which is the final point. Only in exceptional cases, considering the interests of the minor children, can a court derogate from the principle of equal shares, which is rare in practice.