Below we reflect on the nature and principles of the presumption of sharing, those governed by it, and the scope of the assets and property to which it applies.
In the past, in view of a reality where most of the property was registered in the name of one of the spouses, primarily the husband, then, to avoid a situation of deprivation and injustice, the presumption of sharing was developed, to the effect that all assets accumulated during the marriage are jointly owned, and the formal registration of the ownership does not determine the material ownership therein.
Origin and nature of the presumption – The presumption of property sharing by spouses was consolidated in Israeli case law in reference to the manner of sharing and distribution of assets between spouses who were married before January 1, 1974. Spouses who were married after January 1, 1974 are governed by the Property Relations Between Spouses Law, 1973 (for further details see the section dealing with the Property Relations Law).
The rule that there is a presumed right to joint ownership of property by spouses was consolidated in case law on the basis of social and economic reality treating the relations between the spouses as relations between equals and this is also the purpose thereof – the fulfillment of an ideological concept based on principles of equality and justice.
Conditions of the presumption – The presumption is applied to a couple leading a normal life-style whose behavior shows a joint effort, to the effect that the property is jointly owned by them. Namely, the conditions stipulated by case law for the application of the presumption of sharing are the existence of “a normal life-style” and “joint effort”.
Compliance with the conditions of the presumption – At first the presumption was applied in a limited and specific manner, to spouses who had cohabited for a long time and had led a harmonious life-style. However, subsequently, this requirement was narrowed down to the condition of cohabitation under one roof without rupture or actual separation. It was held that quarrels between spouses from time to time do not in themselves deny the sharing between the parties, since life experience shows that a relationship between spouses is subject to ups and downs, and that this holds true for most of the married couples. Accordingly, to comply with this condition, there is no requirement that the married life is led over many years in tranquility without any fluctuations.
Applicability of the presumption to business property – With the development of case law the presumption was expanded and the principle was applied to the effect that there is no reason to distinguish between family assets (of which the most prominent is the residential apartment) and business property, even where the husband does not involve his wife in his business and even where the wife is not involved at all in the business and is busy looking after the home and the children or where she works as an employee elsewhere, still the presumption will apply upon satisfaction of the minimum of cohabitation where each of the spouses contributes his share both in and outside the home.
The applicability of the presumption to “external assets” – The trend in case law is characterized by an increasing liberalization to the extent that it was held that property sharing between spouses may also apply to “external assets” purchased by one of the spouses even prior to the marriage.
This extension was applied in circumstances of long marriages for tens of years where the spouses conduct the domestic household through joint efforts, either by working at home or by working outside the home. This leads to blurred boundaries and to an assimilation of the property to the extent that the ownership in respect thereof cannot be distinguished and hence the presumption applies.
It should further be stated, that with the development of case law, the distinction between the residential apartment and business property has disappeared, and the presumption of sharing is applied both on residential apartments and business properties.
Denial of the presumption – A party seeking to refute the presumption, has to prove a real intention by the spouses that a specific property would not be shared. It should be emphasized, that this is a very difficult task requiring many significant elements for the court to determine that the presumption of sharing does not apply to the couple before it. This is so since the very registration of the property in the name of one of the spouses does not, in itself, refute the existence of the presumption of sharing, for the presumption of sharing was basically created to deal with cases where the property is registered in the name of one of the spouses.
Thus, for instance, it was held that having separate bank accounts does not necessarily show the spouses’ intention of property separation; likewise, the very management of funds or assets in the name of one of the spouses does not deny the ownership of the other spouse in these assets.
Further, a spouse cannot “exclude” assets from being shared by performing a unilateral act deviating from the couple’s normal conduct. The exclusion of an asset from being shared should be performed by a positive act and in agreement between the parties which is reflected in a property relations agreement (see in this context – “agreements”).