Natalia Demina has given an opinion to RBC on possible changes in the procedure for the division of property during a divorce

Natalia Demina - Senior Associate

Pavel Krasheninnikov, Head of a State Duma Committee, and Tamara Pletneva, Head of the Family Affairs Committee, introduced a bill to Parliament that will create a concept of common property of spouses in the Family Code, which provides for its division in the event of a divorce in a single trial. The explanatory note to the proposal states that in current practice the property of spouses is considered as a set of assets, which allows unscrupulous ex-spouses to file different claims several times on the division of common property. “And only when, after some time, the heirs of one of the spouses or his creditors appear, the question arises of what is the fate of property not mentioned in judicial acts. In what proportions is it divided between them, and was it divided at all?” stated the law’s proposers.

For RBC Petersburg, the Head of the Private Wealth practice at Maxima Legal, Natalia Demina, studied the bill and provided an evaluation.

“After studying this bill, I have more questions for its authors than answers. The authors of the bill absolutely rightly draw attention to the fact that family law binds certain rights and obligations of spouses to absolutely value concepts. For example, the fact that a particular debt in a marriage is recognised as general or personal depends directly on whether the money was spent on “the needs of the family” or was spent on “personal needs” (both are valuation concepts). Or, for example, another category, the “extremely unfavorable situation” of one of the spouses – as the basis for invalidating a marriage contract.

But the proposed changes, in my opinion, do not solve this problem. The proposal itself to consider both property and debts as “an integral property complex”, “regardless of whether it was acquired in the name of one of the spouses or in the name of which or by which of the spouses was paid,” seems controversial.

In practice, the structure of the common property of the spouses is diverse and can consist of the contributions of each spouse with a different percentage. Moreover, the contribution of one of the spouses to the formation of common property can be made at the expense of personal income. Judicial practice now takes into account such situations, and the court can, derogating from the equality of shares in the division, determine them in relation to a specific property, for example, a country house, like 9/10 and 1/10, and not 50/50.

The proposed changes can unambiguously lead to a violation of the rights of one of the spouses – the spouse whose contribution was greater and due to personal income. If we put on the scales the possibility of abuse in multiple processes, which the initiators write about in the explanatory note, and the possibility of violating the law, then the choice should always be in favour of protecting the law.

In addition, it seems to me that the abuses of the ex-spouse mentioned are not every-day and widespread practice. In our practice, in most cases, the client and ex-spouse try to share all the property in one process. Of course, a situation may arise in which one of the spouses hides some of the property from the other during the division. Usually we are talking about foreign assets (real estate, shares in companies, accounts) or movable property (investment shares, securities, rights of claim under loan agreements).

If at the end of the case on the division of property, the spouse finds information that during the marriage, it turns out, an apartment in Spain and a share in a company in Hong Kong were acquired, then he/she has the right to start another process on the “balances” section, because he/she has a right to a share in all jointly acquired assets. At the same time, even if we are talking about multiple processes, it should be noted that such fragmented cases still do not lead to a review of previous division court cases.”

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