January 1, 1974 is an important date in family law in Israel, as it came into effect on that day. Law Financial Relations between spouses, which fundamentally changed the manner in which the joint property of spouses is divided during divorce.
Until the Financial Relations Law came into effect, there was a legal presumption called the presumption of partnership, which was based on the simple fact that when a couple gets married, all of their property is considered joint, and therefore when they divorce, the property must be divided equally between them.
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This sharing regime has created many difficult disputes in all court instances, and the legislature has attempted to resolve them by enacting a Financial Relations Law, which puts the matter in order and establishes clearer rules regarding the division of joint property, whether it concerns married couples or whether we are dealing with a single person. In the public in the public.
These rules are called resource balancing arrangements.
The scope of joint property in the resource balancing arrangement
One of the important rules set forth in the Financial Relations Law states that, despite the parties’ marriage, gifts, Inheritances And assets from before the marriage are not included in the joint property intended for division between the spouses upon the termination of the marriage, according to Section 5A1, which was amended as part of Amendment No. 4 in 2008.
Additional exceptions to the common property are all assets that are explicitly excluded within the framework of Agreement Finance According to Section 5A3 and National Insurance benefits or compensation that have been awarded or are due by law, due to bodily injury or death, according to Section 5A2, as amended in 1990.
It is important to understand that the resource balancing arrangement stipulated in sections 3 to 5 of the Financial Relations Law applies by default and only takes place in the event that the parties have not signed a financial agreement, which regulates the division of joint property by agreement, according to Tamash, Jerusalem 1748/04 A.B. vs. N.B. 2008.
However, the way is open for the spouses to prove to the court that, in special circumstances, assets that are excluded under Section 5A1 of the Financial Relations Law should also be included in the balance of resources.
This is what happened, for example, in the procedure TAMSH 35790/95 So-and-so n So-and-so 2010, where it was determined that the residential apartment must be divided between the parties, even though it is registered only in the husband’s name and even though it was purchased by him before the marriage.
This means that all other property is joint and divisible between the parties, including debts accumulated by one of the parties and assets registered in the name of only one spouse, which were acquired during their life together.
In recent years, the case law that discusses career assets, reputation, and earning capacity as balanceable assets within the framework of a resource balancing arrangement has been expanding.
This is actually the couple’s financial reserve, which reflects the studies and effort that the working spouse has invested in his career, as well as his personal talent. TAMSH, Jerusalem 8340/07 B.W. vs. A.W. 2012.
This reflects the holistic approach of My family Family Law, which is careful to see the entire economic picture, including the past and the future, and to discuss it as a whole.
Possibility of unequal resource balancing
Another essential rule stipulated in the Financial Relations Law is found in Section 8 (2), which authorizes the court to deviate from the default of equal division of the joint property and balance the resources of the spouses also by means of unequal division of the joint property, in accordance with the judge’s discretion and according to the concrete circumstances of the case. Tel Aviv Municipal Court Case 32105-05-10, A.G.S. vs. the estate of the late S.A.S., 2012.
The spouse claiming unequal division must prove through evidence that special circumstances exist that justify unequal division.
It should be emphasized that there is no definition in the law of what special circumstances are and the issue is open and subject to change, in court rulings. TAMSH TB 41427-12-10 N.L vs. N.L, 2014.
For example, the Family Court in Petah Tikva ruled, in a proceeding TAMSH 39590-06-12 So-and-so vs. Unknown, 2014, a distribution of approximately 55% to the wife and 45% to the husband, after the wife was able to prove that the husband had career assets and a personal reputation and that his earning capacity was significantly higher than her earning capacity.
On January 7, 2014, the Supreme Court ruled in Case No. 7272/10 unequivocally that an unequal balancing of resources can be carried out under Section 8 of the Financial Relations Law even in the case of serious violence by one spouse towards the other.
In that case, the husband was convicted of attempting to murder his wife and of serious violence during their years of marriage.
The Supreme Court rejected the husband’s interesting argument, according to which the guiding principle of the resource balancing arrangement stipulated in the Financial Relations Law is the balancing of resources without fault, and therefore his economic share of the joint property should not be deducted on the grounds of violence, just as they would not do so in the case of infidelity, according to a settled case law of the Supreme Court in the proceeding. HCJ 8928/06 Plunit v. The Great Rabbinical Court of Appeals in Jerusalem, 2008.
The law that the Supreme Court refined and honed in the ruling in the proceeding Ltd. 7272/10 It is that Section 8 of the Financial Relations Law granted the court very broad discretion in order to balance the resource balancing arrangement according to the circumstances and to change the default according to special circumstances proven before it.
The court ruled that serious violence by a spouse is indeed considered a special circumstance, which harms the financial capacity of the other spouse and therefore fundamentally changes the balance of power between the parties.
This determination is consistent with legal, moral, and public policy to condemn domestic violence and take sanctions against it.
The process of balancing resources between spouses during Divorce As stipulated in the Financial Relations Law, agreed upon by the Supreme Court in a ruling, Case No. 803/00 Steinmetz vs. Steinmetz, 2001: “Balancing resources between spouses means adding up the values of the assets, deducting the debts and dividing the balance between the parties, usually half and half, unless the court decides otherwise, by virtue of its authority under Section 8(2) of the Financial Relations Law.”
From a practical perspective, in order to accurately calculate the parties’ property, family courts usually use an accountant or the services of another expert in the accounting field (actuary) and authorize him to actually collect all the information and economic data relating to the spouses’ property.
The accountant submits to the court a summary of the financial information he has collected, including recommendations on his behalf regarding the actual distribution of the parties’ property. The court may accept or reject these recommendations, in accordance with its authority under Section 8 of the Financial Relations Law.
Implementation date of the resource balancing arrangement
Another important issue regulated by the Financial Relations Law is found in Section 5A, which was added in November 2008, as part of Amendment No. 4, and is the date of balancing resources, known in legal jargon as the date of rupture.
The joint property will be considered to be everything accumulated from the beginning of the joint life until the date of the breakup, and from this it can be concluded that everything accumulated after the date of the breakup will not be included in the balance of resources..
Until the amendment in 2008, there was a strong disagreement among the judges regarding the possibility of making a resource balancing arrangement between spouses before granting a divorce, as the outdated law prior to the amendment did not provide such an explicit option, which encouraged extortion by spouses who conditioned the granting or acceptance of a divorce on a financial arrangement.
There were judges who accepted the situation despite its injustice, but there were judges, including Supreme Court justices, who used a particularly creative interpretation of the law to overcome extortion and determine the date of the valuation of the joint property, at a date early in the divorce, such as Case No. 809/90 Lydai vs. Lydai, P.D. Mo (1) 602, 612-14.
As of today, the date of rupture, before the expiration of the marriage or between public figures, will be determined by the existence of clear signs indicating a final, irreconcilable rupture, due to which it would not be fair to determine that each of them continues to accumulate rights in the property of the other even after the date of rupture – Jerusalem Housing Development Act 13402/08 K.B. vs. K.Y. From 2007 and alsoKfar Saba District Court 3591/02 S.C. vs. H.C..
For example, domestic violence will be considered the date of the separation under certain conditions according to Section 5A of the Financial Relations Law, and one party leaving the common home and financial separation or separation of property for a period of at least 9 months will also be indicators for determining the date of the separation..
The manner in which the above is applied in the court rulings was agreed upon by Judge Alon Gavison in the proceedings. Be’er Sheva Civil Registry Office 19242/08 So-and-so vs. Unknown From 2013:
- As a general rule, the balance of resources must be drawn up as of the date of the marriage’s termination, and deviation from this date will only be made in special circumstances.
- Physical and/or property separation can be a consideration in determining an early separation date, from the date of the marriage’s termination.
- Refusal to grant a divorce, taking into account its circumstances, does not affect the determination of the balance date, except where the refusal to grant a divorce results in enrichment or harm to the refuser at the expense of the other spouse.
In conclusion, regarding the resource balancing arrangement…
process Divorce, Property division And separating from a common life is a significant financial event that must be approached with caution and in a balanced and orderly manner, especially in a situation where the spouses have joint assets and there is no financial agreement between them.
All couples in Israel who married after January 1, 1974, will be subject to the resource balancing arrangement stipulated in the Financial Relations Law, and therefore it is recommended that couples study the issue and the options available to them.
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