Up to the enactment of the Law, matters of finance and property between the spouses were formalized through the Supreme Court’s case law, in the form of the property sharing rule (see the section dealing with the rule of sharing).
Spouses who were married after January 1, 1974, and who had not formalized their proprietary issues by means of a prenuptial agreement (see the section dealing with agreements) will be governed by the arrangement of balancing of resources laid down in the Property Relations Between Spouses Law and each one of them will be entitled to one half of the value of all the couple’s assets upon the termination of the marriage.
It should be emphasized, that this only applies to assets accumulated by the couple in the course of their joint life .The Law provides expressly that assets received by a spouse as a gift or inheritance during the marriage or assets which a spouse had prior to the marriage, are not included in the aggregate assets which are subject to balancing between the parties.
What is the Arrangement of Balancing of Resources?Pursuant to the Property Relations Law, an obligatory deferred right to balance assets on the date of the termination of the marriage is conferred on each of the spouses. The date of the termination of the marriage is defined in the Law as the actual divorce or demise of a spouse.
Only upon the termination of the marriage will each of the spouses be entitled to one half of the value of the couple’s assets, apart from the assets which they had prior to the marriage, or which they received as a gift or inheritance during the marriage, or a pension received by one of the spouses by the National Insurance Institute, or a pension or compensation awarded or payable to one of the spouses due to bodily damage or death, and apart from assets in respect of which the parties had agreed in writing that the value thereof would not be balanced between them.
The problematic character of the Law – As aforesaid, the Law provides that the actual date of the balancing of resources and distribution of the property will take place upon the termination of the marriage due to divorce or in the wake of the death of either of the parties, as distinct from the property sharing rule , pursuant to which the sharing is proprietary and a spouse may demand the division of property at any given time.
Due to the deferred date provided in the Property Relations Law, an opportunity for extortion is created, allowing the application of pressure which is reflected in economic concessions.Normally, the strong party, in whose name the lion’s share of the property is registered, having the economic capability to conduct a lengthy litigation, takes advantage of this to subdue the weak party and thus leads him/her to make financial concessions, in order to break free from the bond of marriage.
Award of a declarative judgment – There is an inconsistency in the courts’ case law with respect to the possibility of awarding a declarative judgment in connection with the spouses’ rights to the aggregation of their assets prior to the termination of the marriage.There are judges according to whom, no declarative judgment should be awarded in respect of the proprietary rights, and at most, the court will agree to a motion to protect rights pursuant to section 11 of the Law (see below), so that none of the spouse’s future rights whatsoever will be adversely affected up to the termination of the marriage.On the other hand, some others believe, that claims for a declarative relief filed even prior to the termination of the marriage should be granted, out of a wish to protect the spouse’s rights.
In view of the problematic character of the Law, which gives an opportunity for financial extortion, the settlement of the conflict is sometimes carried out so that the Court tends to issue declarative relief even prior to termination of the marriage, where there is a concern that the spouse would smuggle out property or adversely affect the rights of the other spouse.The Court also tends to issue declarative relief in cases where it is convinced that the marriage has ended and it is only financial issues that are delaying the issuance of the divorce.
Proof of a specific intention to share the property – Furthermore, a trend has developed in case law, allowing the recognition of a spouse’s right in assets which are registered in the name of the other spouse, even prior to the termination of the marriage.Where there is a property that was registered in the name of one of the spouses and the registration does not reflect the true ownership therein, or in the case of unregistered property whose owner cannot be identified, the ownership in such property can be determined pursuant to the general law, relying on contracts law, property laws, trust laws, agency laws, unjust enrichment laws and the principle of good faith, with a view to determining the true ownership, irrespective of the formal registration in the property.
An apartment which belongs to one of the parties from before the marriage – A frequent question concerns the rights in the apartment that belonged to one of the spouses before the marriage.In this case too the Law provides that a property that belonged to one of the spouses before the marriage shall remain in his/her possession.However, in view of the fact that the residential apartment is a significant domestic asset, referred to in case law as the “crown jewel” of domestic assets, and since it is the most significant property of the spouses and sometimes also, the only one, according to case law consideration should be given to the partner claiming joint ownership in the residential apartment pursuant to the general law, where it is registered in the name of one of them only.
It was emphasized that the very existence of joint married life, however long, is not sufficient, to determine sharing in the residential apartment by virtue of the general law.
For the purpose of granting rights in a residential apartment registered in the name of one of the spouses to the other spouse, the spouse claiming such rights must show factual circumstances in addition to the very existence of the marriage, from which the conferring of the rights in the residential apartment can be inferred, by virtue of the general law.
It should be emphasized that in any event, the court examines the specific circumstances, in the light of the principles of justice and equity, in a broader perspective than the formal approach of relying on the registration of the title.
Remedies for protection of rights – The legislator protected the right of the spouse in whose name the assets were not accumulated through section 11 of the Property Relations Between Spouses Law, which permits the adoption of measures for protecting rights conferred in accordance with the arrangement of balancing of resources.These are remedies earmarked to maintain the status quo pending the decision in the action, designated to ensure assets for the implementation of the judgment or for the conducting of the trial.Pursuant to this section, temporary orders are issued including injunctions and attachment orders, while some judges interpret this section as one that permits the awarding of declarative judgments in respect of the spouses’ rights in the property.
The remedies pursuant to section 11 are also significant in view of the requirement to wait until the termination of the marriage for the purpose of performing the arrangement of balancing of resources.
Change in the basis of the balancing – Section 8 of the Law vests special powers in the court whereby the court may determine, that certain assets will not be balanced between the parties, or that the balancing of the value of the assets will not be half by half but by a ratio to be determined by the court.The application of section 8 of the Law will be implemented by way of the filing of a separate claim after the termination of the marriage, where the distribution of the property is not determined within the framework of the divorce, and it will actually be applied by the court only in certain circumstances that warrant this.
When the court acts pursuant to section 8 of the Law, it will weigh an aggregate of pertinent considerations.Thus, for instance, special consideration will be given in the case of a lengthy separation between the parties. The absence of sharing between the parties for a long time prior to the implementation of the balancing, will allow the court to exercise its power and to determine the date on which the value of the spouses’ assets be assessed.
It should be noted that the use of section 8(2) of the Law, allowing the court to instruct an uneven distribution of assets between the spouses, is made carefully and in highly exceptional cases. This is so since the very application of this section adversely affects the legal certainty and the parties’ expectations.Further, this also amounts to an adverse effect of the proprietary rights.
It was held in case law, that in appropriate cases, such as where physical and mental violence has been proved, and particularly where the violence is not one-off but on an ongoing basis, use may be made of section 8(2) of the law, in a manner reflecting consideration of equity, requiring, that within the framework of the distribution of all the assets, the beaten wife’s share (for instance) will be greater.Furthermore, section 8(2) of the Law can be exercised in cases where the court held that a party smuggled out property, the extent of which is unknown to the court.In such event the court will act in accordance with the power vested in it and will determine a different ratio for the balance between the parties.
Property agreement – A property agreement is a forward-looking agreement, the purpose of which is to formalize the proprietary relations between the spouses.The unique nature of the Property Relations Between Spouses Law in the result of the special requirement for a legal proceeding for the ratification of such an agreement where the court is required not only examine the identity of the contracting party and his/her free will, but to also ensure that each of the spouses has understood the significance of the agreement and the consequences thereof (see discussion in greater detail in the section “Agreements“).