Financial Agreements between Spouses

In Israel many spouses to not have financial agreements. Many couples assume that any assets that they acquire during marriage are joint assets. This not necessarily true.

The law allows couples do make any financial agreement that they decide to make. The law stipulates that the agreement must be In writing and it must be certified. The certification process depends on when the agreement is made and signed. Prior to the marriage the couple can appear in front of a Notary and sign the document and have it certified. The couple can also have the agreement certified before the the marriage registrar. These options are not available after the marriage. The couple after the marriage must appear before a judge of the family court or a religious court in order to certify the financial agreement.

In the absence of a financial agreement chapter 3 of the Law of Financial Relations between Couples will take effect. The law recognizes the fact that during the marriage each party has the sole ownership of his/and her property and the assets acquired during the marriage are not joint property .Of course if the couple bought an asset together and registered the property as joint property as is usual in the case when a couple purchases a home the property will be joint property. On the dissolution of the marriage or a breakdown in the marriage as defined in the law the assets acquired by each spouse during the marriage must be balanced, with the assets of the other spouse. This means in principal that each party to the marriage should have assets equal in value to the other party when the marriage is dissolved or breaks down. The court has the authority to determine how the balancing (איזון) should take place.

The assets to be balanced include pensions social and social benefits. The court may also take into account the earning potential of a spouse if it was acquired during the marriage. Although in principal the assets should be equalized the court in special situations has the right to balance the assets not equally. The issue is often complicated and often leads to endless litigation.

Couples would be wise to seek legal counsel and sign financial agreements which conform with their wishes , and not leave the matter to the courts to decide in the event of the dissolution or break down of the marriage.