Everything you need to know about community of accrued gains, alimony payments and pension equalization at a glance.
When spouses separate, there is a lot to settle. Accounts must be closed, insurance policies and household effects separated, and mutual financial claims clarified. What do you have to take care of immediately after a separation? What does a divorce cost? We answer the most important financial questions. Important: If a divorce does occur, talk to a lawyer who specializes in family law in good time.
For better or for worse. That’s what couples who want to spend the rest of their lives together promise themselves year after year. In 2017, there were over 400,000 marriages in Germany. The unromantic reality:
of marriages are later divorced again — on average after 15 years (Statista 2017).
What is a great burden at first, especially emotionally, is also a challenge for many financially. After all, everyone now needs something of their own — their own place to live, their own furniture and crockery, their own insurance, possibly their own car.
Especially if both partners were not equally responsible for financial security during the marriage, it often gets tricky. So who owes how much to whom? And for how long?
The basic rule is:
In a divorce, there is financial compensation at various levels.
- Assets and property: The tangible assets of a couple that are jointly owned are divided between them (in terms of value), such as financial assets, securities or real estate.
- Equalization of gains: All assets are included in the gain, regardless of whether they are jointly or solely owned.
- Property division in other respects: This includes assets that are jointly owned, especially real estate.
- Household goods: Household goods that belong to the spouses jointly are divided according to the principles of equity.
- Alimony: To compensate for financial differences, the higher earner pays a regular amount to his or her ex-partner.
- Pension equalization: This involves financial compensation for pension entitlements. Entitlements acquired in the course of the marriage are divided equally between the two partners.
Equalization of gains and division of assets in other respects
Unless otherwise stipulated — for example, in a prenuptial agreement — the following applies: A marriage is a community of accrued gains. In the event of divorce, all assets earned during the marriage are divided fairly between the spouses — both monetary assets and real estate or other property. It does not matter which of the two partners financed this.
For this purpose, the accrued gains of each spouse are determined. The respective initial assets (on the day of the wedding) are compared with the final assets (on the day the divorce petition was served). If one partner has gained more assets than the other, he or she must give up half of the difference. Usually, the settlement is made in money; in the case of goods, the value is determined. Debts must be deducted.
Important: If one spouse already brings assets or property into the marriage, or if he or she inherits or receives something as a gift, only the increase in value is included in the division. Assets in this sense are all objects, rights or securities that have an economically measurable value.
In order for existing assets to be taken into account in a divorce, they must be disclosed to the court or to the spouse. However, whether both spouses provide true information is not necessarily verified. In the event of a divorce, it can be advantageous for you to have an overview of what your partner earns, whether he or she has life insurance or a stock portfolio. Especially if you separate in a dispute, it is advisable that you copy all important information and documents. Bank statements, salary slips, pension insurance policies, securities statements, building society contracts, pension notices, rental income … All of this can help you avoid losing money in a divorce.
By the way: not only joint assets are divided after a separation, also joint debts remain for both partners after a divorce. The parties should find a solution to this.
During the separation year, the sole or main earner is usually obliged to pay alimony (separation maintenance) to his or her ex-partner. These payments serve to ensure that the financially weaker spouse is protected and can thus start a new life more easily. For this to happen, the separation must have been completed, i.e. the domestic partnership must have been abandoned.
The basic rule is that after a divorce, both spouses should provide for their own livelihood. In order to still be entitled to money from the ex-partner after the separation year, special requirements must therefore be met.
One reason for post-marital maintenance is the care of joint children. Up to the third birthday of the youngest child, the caregiver is entitled to so-called childcare maintenance. After that, he or she may have to provide for him or herself.
Other reasons for continuing maintenance from the ex-partner can be illness or old age. Separated persons are also entitled to maintenance due to unemployment or during training.
Child support is independent of this. Those who take care of the joint children receive monthly money from the other parent. This money is used to pay for room, board and clothing for the offspring.
The amount of child support is usually based on the Düsseldorf table. This table provides guidelines that vary depending on the age of the children to be cared for. Note: The payer must have enough money to live on. The monthly deductible for an employed person is currently 1,200 euros for the divorced spouse and 1,080 euros for minor children.
In the course of a marriage, a couple not only acquires joint property and generates assets. Those who work also accumulate points for their pensions over the years — important for ensuring security in the future.
In the event of a divorce, the pension points earned by both spouses during the marriage are divided fairly. This is particularly important for the partner who has paid less or no pension insurance.
of the pension rights accumulated during the marriage, each spouse receives
By the way: With the implementation of the so-called pension equalization, not only the claims from the statutory pension are divided. Civil servants’ pensions, Riester or Rürup pensions, company pension schemes, occupational pension schemes or, if applicable, private life insurance policies are also taken into account. The court decides on the exact division of pension entitlements in the divorce proceedings without a separate application. Only couples who have been married for less than three years have to apply for this.
Newly separated: You should settle this now
Knowing what to expect financially after a divorce is one thing. However, it is just as important to take charge of your own finances immediately after separation. A checklist for you:
1. secure your own account
As a married couple, it is not uncommon for both spouses to have a joint account. After a separation, you should set up your own bank account as soon as possible and redirect your own payments to the new account. You should also transfer half of the joint money to each other. After all, you own half of the credit balance that you earned together until the day of separation.
To prevent your partner from using up the joint account and incurring debts, you should also cancel existing overdraft facilities and revoke direct debit authorizations. This is because you are jointly liable for joint accounts and contracts.
2 Take out your own insurance
Whether health insurance, liability insurance or household insurance: Often one of the spouses takes out an insurance contract, the other is considered to be co-insured. However, these co-insurances expire at the latest with a divorce. Therefore, after a separation, get an overview as soon as possible of which insurance relationships exist and whether you yourself are the policyholder.
Health insurance: If both spouses work, each has his or her own health insurance. If one of them has had family insurance through his or her partner up to now, this insurance relationship can only continue for up to three months after the divorce.
Private liability: As a rule, one spouse has taken out this insurance, the other is considered to be co-insured. This insurance relationship ends on the day of divorce. Joint children continue to be insured beyond this date.
Household insurance: It continues to exist for the person who has taken out the insurance. If he stays in the shared home, nothing changes in the contract. If he moves to a new home, this must be reported to the insurer. The other partner is required to take out his own insurance.
Life insurance: A life insurance policy remains in force even after a divorce. Since the spouse is often entered as the beneficiary, this should be changed immediately after a separation.
Even if the insurance coverage for co-insured persons remains in force until the divorce, it is advisable to take care of your own insurance already at the time of separation.
3. outline new financial situation
When separating, it is important to look into the future. Therefore, estimate how much money will be available to you through your own income, alimony or other benefits.
Can you count on money from your ex-partner? If yes: how much? What will it cost you to have your own apartment, car or insurance? Also keep in mind that you will be moving to a different tax bracket. This can sometimes be a financial burden.
4. find out about financial support
There are always cases where it is difficult to make ends meet financially after a separation. Often this is because the ex-partner is not able to pay the necessary alimony or it is simply not enough.
Then, for example, an advance on maintenance payments can help you. This state benefit helps you to finance the living expenses of your children. As a single parent who is dependent on unemployment benefit II, you can also claim additional needs.
5. plan for the costs of divorce
In the case of a divorce, there are always costs for lawyers and court fees. How high these costs are, is calculated according to how high the procedural value is. And this in turn is determined on the basis of the incomes of both spouses and their assets.
The rule is: the more work is involved for lawyers and judges, the more expensive the divorce will be. It is therefore worthwhile to dispute as few points as possible. Spouses can also reach an out-of-court agreement on the essential points and conclude a notarized agreement on the consequences of divorce. This concerns, for example, alimony, equalization of gains and issues concerning the children. By the way: It is not possible to share a lawyer.