Resource balance
Balancing resources and economic relationships between spouses
The cohabitation presumption applies to couples who married before 1974 and are common-law spouses. It is acceptable that assets accrued during the marriage / cohabitation are jointly owned even if registered in the name of one of the spouses.
There are several arguments for this:
* Inclusive agreement – (implied and unambiguous conditions) the intention of the parties, living in peace and investing a joint effort, that the property will be joint. The opinion of many is that the inclusive agreement is a tactical tool that is used to gain a foothold of the contracts law field into the family law.
* Justice Argument – This is a partnership argument. Both spouses invested money to accumulate assets. While the spouse developed a career and purchased properties in his name – the other side took care of the children and the home and removed from the other side all the household worries. If so it is not fair that the other party will enjoy the assets exclusively. The issue of fairness affects the business assets – if you wish to see a family as a unit on its own, then fairness and justice must include the whole set of assets, including the business, in the equation.
* Gender equality – Usually the cases were in which the man developed a career, earned higher wages and purchased property in his name, then the balance was in the woman’s work at home, equal to the man’s work outside. Allocation of assets by registration only may harm the female gender in cases where the woman is the economically weak party. It should be noted that today this phenomenon is diminishing and there are opposite cases, in which the woman earns more than the man and then she acquires assets in her name which in the future will be divided together with the man.
In balancing resources the central presumption is that a married couple intended to share their property with each other (the presumption is contradictory, but the burden of proof is on the party claiming against the sharing). In a judgment handed down in 1994, HCJ 1000/92 Bavli v. The Great Rabbinical Court, Judge Barak ruled that the rule of co-operation of the Supreme Court relies on an inclusive agreement between the parties, is drawn from their behavior, and considers property as joint if acquired under a proper lifestyle and with a joint effort. In the socio-economic reality, it is usually the man who buys property and registers it in his name, so if he claims against the sharing – the proof is to be provided by him.
As stated, the sharing presumption is legally strong, and the judge must automatically assume that it exists, but the parties are given the opportunity to contradict it. The court says that we assume that spouses during their married life intended to fully share the property no matter who purchased, held or operated it.
The cohabitation rule states that no act of divorce is required in order to divide the property of the spouses and each of the spouses is entitled to claim his share of the property at any time.
In 1973, there was a change in the perception of the division of property between spouses when the Israeli Legislature approved the Matrimonial Property Law. The adoption of this law has in effect changed the rules of the game which has hitherto existed as far as the economic relations between spouses are concerned and has established new rules.
First, the applicability of the law is to those who were married religiously and lawfully after 1974 and to those only.
According to the law, the starting point is that as long as there is no financial relationship agreement that explicitly defines the assets belonging to each of the spouses, the rule of balancing resources will apply.
The law distinguishes between three types of assets:
* Property that belongs to one of the spouses before the marriage, for example: Yael purchased an apartment that was registered in her name. After about two years, Yael married Aviram – in accordance with the Financial Relations Law, the apartment she purchased does not fall under the wings of the Financial Relations Law and will remain the sole property of Yael.
* Private assets: these are gifts, inheritances, compensation for bodily injuries, which one of the spouses received during their life together. The same private assets belong to the spouse, who received them even though he was married at the time.
* Joint income: The rest of the assets that the couple accumulated during marriage, including property, business gains, financial assets, social gains, etc.
The Maternal Relations Act stipulates that in the event of a divorce, the joint property accrued by the spouses during their marriage will be divided equally by calculating the total property accrued from the date of marriage until the determining date and this will be done as part of a balance of resources. Of course every rule has an exception, and the law sets certain exceptions, which depend on the circumstances of each case.
What is a Resource balancing?
When we talk about resource balancing we are referring to the type of joint assets only that the couple accumulated during their marriage.
The balancing of resources is done by listing all the assets that were accumulated during the marriage, including properties that are registered in the name of one of the spouses. On the other hand, listing all the joint debts including loans and mortgages. After calculating the value of all the joint property, the joint debts accumulated together by the spouses are deducted from this amount. After making the calculation accurately the amount is divided equally – half the amount each of the spouses.
The question arises, can the sharing rule which was the customary rule until 1974 be subject to the Financial Relations Law and its provisions regarding the balance of resources?
The Supreme Court ruled that the rule of sharing that existed before the enactment of the Financial Relations Law could not coexist with the resource balancing arrangement established by the legislature for all those who married after 1974.
However, the Supreme Court ruled in a series of judgments that There are situations where the circumstances can create a ground in which there is an intention to share a specific property, even though the property belongs to one of the spouses and the property was purchased before the marriage, then if it is decided that there was a specific sharing intention that property will be divided equally between the spouses. The intention of sharing actually opens a window to appear before the court and argue that a balance of resources should be made on a property, which is registered in the name of one of the parties and purchased before the marriage and thus when a sincere desire and intention is proven to do so.
