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 for foreigners for coming to Denmark is LOVE. We meet our tall, blond, humble Dane. We fall in love head over heels and decide to 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 educations become more or less worthless. Overnight, we become deaf and mute, and we feel like a fish out of water. Our struggle becomes our relationship’s struggle, and we may ponder: “What if…?” This article is going into a commonly asked question: your rights in marriage, according the Danish Marriage Law (Lov om ægtefællers økonomiske forhold, nr. 548 af 30/05/2017).


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


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


In a marriage, partners have the duty to support each other financially. A partner’s spousal support is her/his own 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 include in the shared property according to article 26, are:

  1. Assets under marital agreements
  2. Assets for personal use: clothing, jewellery, means of transport, etc. 
  3. Pensions
  4. Personal compensations due to accident, damages, injuries, etc.
  5. Untransferable rights, for example heritage
  6. Right to compensation from the other partner’s misbehaviour and other adjustments
  7. Compensations in special situations: having less saving/pension due to family duty, child rearing, disadvantage 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, and personal compensation and untransferable rights.


The family’s home is exempted from 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, also when only a part of the home is shared property. If one partner violates the rule, the court can declare the contract with a 3rd party to be null and void. Rules on the family’s home only apply for properties in Denmark.


Equitable distribution of property
The net asset (asset minus debt) will be distributed equally between partners. Equitable distribution should not understand as exactly 50/50 to each partner. It means reasonable division between partners, which takes into account each partner’s contributions to the marriage. That is the reason for under the Danish marriage law, a stay-at-home mum gets compensation for her time taking care of the children, or for her reduced pension and lower income due to time spent for the family. In the incident of separation or divorce, if the other partner neglects it, the law would give the stay-at-home partner the right to compensation, according to article 41 and 42. The spouse should claim this right at the same time for applying for separation or divorce, not after the process is completed.


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 was in 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 chosen language to ensure coverage for Danish and non-Danish readers.