June 2019

We are not only doing accounting,

we are hunting for tax deductions.

Know your rights in marriage: Assets

June 2019.


One of the common reasons foreigners come to Denmark is LOVE. We meet our tall, blond, humble Dane. We fall in love head over heels and commit our lives to them, thinking “Come what may”. One day, we arrive in the Nordic country, and the reality kicks in.


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Our education becomes more or less worthless. Overnight, we become deaf, mute, and like a fish out of water. Our struggle becomes our relationship’s struggle, and we may ponder: “What if…?” This article goes into a commonly asked question: your rights in marriage, according to the Danish Marriage Law (Lov om ægtefællers økonomiske forhold, nr. 548 af 30/05/2017).


Assets
According to Danish law, each partner has the right to his/her share of property in marriage, except assets under separate agreements. The definition of marital property covers both properties acquired before and during the marriage. The topic of marital agreement will be discussed later in article 3 of this series.


In a marriage, partners can agree on assets and liabilities and give each other gifts (which are tax-exempted). These agreements are under the marital contract (ægtepagter) and follow common rules like other contracts: to be written, signed and registered.


In a marriage, partners must support each other financially. A partner’s spousal support is her/his property. If a partner does not fulfil this duty, the State Administration (Statsforvaltningen) can legally force him/her to pay alimony.


In the case of separation and divorce, shared property will be divided equally between partners. Exemptions to the equal division rules are assets and rights, which may not be included in the shared property according to Article 26, which are:

  1. Assets under marital agreements
  2. Assets for personal use: clothing, jewellery, means of transport, etc. 
  3. Pensions
  4. Personal compensations due to accidents, damages, injuries, etc.
  5. Untransferable rights, for example, inheritage
  6. Right to compensation for the other partner’s misbehaviour and other adjustments
  7. Compensations in special situations include having less savings/pension due to family duty, child rearing, a disadvantaged economic situation after divorce, etc.
  8. Spousal support


Partners can make agreements about some of the items mentioned above, such as assets under separate agreements, pension, personal compensation and untransferable rights.


The family’s home is exempted from the partner’s marital agreement. A partner cannot sell, take a mortgage or rent out the family’s permanent home without the approval of the other partner. This applies even when the couple is not living together or in the process of separation or divorce, and only a part of the home is shared property. If one partner violates the rule, the court can declare the contract with the third party null and void. Rules on the family’s home only apply to properties in Denmark.


Equitable distribution of property
The net asset (asset minus debt) will be distributed equally between partners. Equitable distribution should not be understood as exactly 50/50 to each partner. It means a reasonable division between partners, considering each partner’s contributions to the marriage. Under Danish marriage law, a stay-at-home mum gets compensation for taking care of the children or her reduced pension and lower income due to time spent with the family. In the incident of separation or divorce, if the other partner neglects it, the law would grant the stay-at-home partner the right to compensation, according to articles 41 and 42. The spouse should simultaneously claim this right when applying for separation or divorce, not after the process.


The law protects the stay-at-home woman as much as the hopelessly-in-love man. Article 33 allows a deviation from the principle of equal distribution if the marriage is short-term and without significant economic effect on the shared property.

The purpose of this blog is to provide a reliable source of business, tax, and accounting information. English is the chosen language to ensure coverage for Danish and non-Danish readers.