General rule of division
Division of property is a process in which the spouses’ assets are divided. The need to divide property may arise either from a divorce or from the death of one spouse. The division can be carried out as soon as divorce proceedings have been initiated in the district court. The division process begins once one of the spouses makes a claim for the division of property. Division is only carried out in situations where spouses have marital rights to each other’s property. If the spouses have a prenuptial agreement excluding all marital rights, a separation of property is carried out instead of division.
As a general rule, in a division of property based on divorce, the spouses’ assets are divided equally between them. However, there are exceptions, for example due to a prenuptial agreement. The spouses may carry out the division themselves by agreeing on how to divide their property. Alternatively, if they cannot reach an agreement, the division may be carried out by an estate distributor appointed by the court.
Property Not Subject to Marital Rights
Property to which the other spouse has no marital rights includes assets acquired or received by a spouse after the dissolution of the marriage due to the other spouse’s death, whether by inheritance, gift, or will. It also includes assets acquired or received after divorce proceedings have been initiated in the district court.
When Can the Division Be Carried Out?
The division process requires that one of the spouses demands it. The division can be carried out as soon as the divorce application has been filed with the district court. Although divorce proceedings include a six-month reconsideration period, there is no need to wait for this period to pass before carrying out the division. The division may therefore be completed immediately after the case is initiated.
How Is Property Divided?
As a general rule, all marital property of the spouses is combined and then divided equally between them. Each spouse is entitled to half of the total combined assets. In practice, this is done so that the spouse with more assets pays a balancing payment (equalization payment) to the spouse with fewer assets. This payment may be made in money or by transferring property. The paying spouse has the right to decide the form of the payment.
If the spouses have a prenuptial agreement, the division is carried out in accordance with it. In some cases, the division may also be adjusted on the basis of fairness, meaning the general rule is not strictly followed.
The Effect of a Prenuptial Agreement
A prenuptial agreement affects how property is divided. It may cover all property of both spouses. If neither spouse has marital rights to the other’s property, then instead of division, a separation of property is carried out. In such a case, assets are not combined or divided equally; each spouse retains their own property.
A prenuptial agreement may also exclude only certain assets from marital rights. In such cases, division is carried out for the remaining property, which is divided equally, while the excluded assets are left out of the calculation and division.
How Is the Division Carried Out?
Spouses may carry out the division themselves, often with the assistance of lawyers. This is called an agreed division. In this case, the spouses divide their property according to their mutual agreement. A written division agreement must be prepared, signed, dated, and certified by two impartial witnesses.
Another option is court-administered division. In this case, the court may appoint a lawyer as an estate distributor upon application. A document must also be prepared in such cases, but it is signed only by the estate distributor.
In matters related to divorce property division, attorney-at-law Tuula Rainto provides English speaking assistance. He can be contacted for a free 15-minute consultation by phone at +358 10 2995090.