Upon the conclusion of the marriage, a community of property is created between the spouses for the duration of the marriage (the so-called statutory property regime). This means that the spouses have undivided joint ownership of everything they have acquired during the marriage, whether jointly or separately, except for what belongs to the separate property of one of the spouses.
The separate property of a spouse includes any property already owned at the time of marriage, property created by inheritance or received as a gift during the marriage, property rights vested in the spouse as creator of intellectual property (except for remuneration due during the community of property), compensation for injury to a person, property of a customary amount for personal use, and property acquired at the value of the separate property and the value of the property replacing the separate property.
Hungarian law allows spouses to deviate from the default property regime in two ways:
- By maintaining the basic legal framework (community of property) while making alternative arrangements for specific property (e.g. declaring that a particular asset will not become community property).
- By opting for a completely different regime.
When opting out from the default property regime, parties may choose either a marital property acquisition regime or a separation of property regime and pre-nups and post-nups shall be legally binding.
Under the marital property acquisition regime, the spouses are completely independent in terms of property law during cohabitation, separate acquisition applies and neither is liable for the debts of the other. However, as soon as cohabitation ceases, the extent to which each spouse's assets have increased during cohabitation must be assessed, and any surplus assets of either spouse may be claimed by the other spouse (i.e. the increase in assets must be halved.) This system better protects the spouse who earns less.
In a separate property regime, the parties are completely independent in property law and cannot make any claim on the other party when the partnership ends. The only restriction is that household and children's expenses must be shared.
A marriage contract is recommended in the following cases:
1. If the parties have had a previous marriage with children
2. If there is a particularly large gap between their incomes
3. If there are assets that they wish to protect
4. If one of the spouses is involved in a risky business
5. If the parties have different nationalities
6. If they are moving abroad or acquiring assets in another country
Each case is unique, and there are countless reasons why a prenuptial agreement may be beneficial. It is advisable to seek personalised advice >>
The property situation of civil partners differs from that of married couples. Unlike marriage, civil partners /those living in a de facto relationship/ are independent property owners for the duration of their cohabitation, which implies a separation of property.
It is important to note that either partner can claim a share of the increase in assets when cohabitation ends. The partner is entitled to a share of the capital gains in proportion to their contribution to the acquisition. The question of which party is entitled to what typically arises at the time of the break-up of a relationship, and this can raise serious evidentiary issues.
It is therefore evident that the dissolution of a de facto relationship can give rise to complex disputes over the division of property. These can be avoided by the conclusion of a partnership property contract, which creates a clarity in finances.
The validity of both the marriage contract (pre-nuptial and post-nuptial agreements) and the partnership property contract is subject to the countersignature of a lawyer or a notarial deed. Should you have any questions about a civil partnership (de facto) property contract, please do not hesitate to contact us here >>