As a general rule, all property acquired during marriage is considered the joint property of the spouses. This rule has exceptions. Each spouse may have property (including money) in their personal ownership. What is the status of the property acquired with these funds?
The following situations may require regulation:
- Property is purchased or real estate is built with money that is the personal property of one of the spouses. The money can be received as a gift, inherited or acquired before marriage.
- Property belonging to one of the spouses is sold and the proceeds are used to purchase property or build real estate.
- Real estate is being built on a plot of land belonging to one of the spouses.
- Property belonging to one of the spouses is exchanged for other property with or without additional payment.
Can the other spouse claim the property acquired in this way in the event of a divorce?
The property is acquired (built) using the personal funds of one of the spouses
According to Article 35 of the Code of the Republic of Kazakhstan on Marriage (Matrimony) and Family, property acquired during marriage, but with the personal funds of one of the spouses, which belonged to him/her before entering into marriage, is not considered common joint property and is not subject to division (clause 16 of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan "On the consideration by courts of legislation when considering cases of divorce").
It should be taken into account that in case of a dispute, the spouse will have to prove that the house or apartment was built exclusively with money that was his property, and that no common money of the spouses was spent on it. In case of disagreements with the other spouse, this will be difficult, and it is better to prepare for this in advance.
The property is acquired with funds received from the sale of the personal property of one of the spouses
The proceeds from the sale of personal property belong only to one spouse, in whose personal ownership this property was. Therefore, according to the norm specified in the previous paragraph, the acquired property will be the personal property of the spouse whose funds were used to acquire it.
A situation may arise when the proceeds from the previous transaction are not enough to purchase the property and additional payment is required from the spouses' common funds (for example, common savings). In this case, the purchased property will become common property, but the size of the shares will be determined taking into account how much of the proceeds from the sale (personal funds of one of the spouses) and the common funds of the spouses are invested in this property.
Construction on the plot of one of the spouses
In this case, the built house will be the personal property of the spouse only if the personal funds of this spouse were used for its construction (for example, received as a gift or inherited). If the house is built at the expense of common funds, then it will be common property, perhaps not in equal shares, since the value of the share of one of the spouses must increase due to the value of the land plot.
Exchange of property of one of the spouses
If the property of one of the spouses is exchanged for another property of equal value without additional payment (for example, an apartment for a residential building), then the latter property, in accordance with Article 35 of the Code, becomes the personal property of the spouse who exchanged his or her property.
The situation is more complicated when an additional payment is made during the exchange. If this additional payment is made from the personal funds of the spouse exchanging his property, then the new thing also remains in his ownership.
However, more often the exchange is made with an additional payment, which the spouses make at the expense of their common income (salary, savings, bank loan, etc.). In this case, the property received in exchange will become joint property, but the size of the shares will be determined taking into account how much money each of the spouses and the common funds invested in this property. For example, a 2-room apartment that belonged to one of the spouses before marriage, worth 6,000,000 tenge, is exchanged for a 3-room apartment worth 8,000,000 tenge. The additional payment is made at the expense of the spouses' savings made during the marriage in the amount of 2,000,000 tenge. In this case, the first spouse's contribution to the new apartment will be 6,000,000 + 1,000,000 = 7,000,000 tenge, and the second spouse's contribution will be only 1,000,000 tenge (half of the total additional payment). Thus, the spouses' shares in the new apartment in the event of its division will be 7/8 and 1/8, respectively.
The impact of subsequent improvements on the size of spouses' shares
It should be taken into account that, according to Article 36 of the Marriage (Matrimony) and Family Code, the property of each spouse may be recognized as their common joint property if it is established that during the marriage, investments were made at the expense of the common property of the spouses or the property of the other spouse, or the labor of either spouse, that significantly increased the value of this property (major repairs, reconstruction, re-equipment, etc.). Therefore, the court, at the request of a spouse, may recognize his right to a share in a built house or renovated apartment. The court determines the size of the share based on the specific circumstances of the dispute.
How to avoid disputes over determining shares between spouses?
To avoid uncertainty in this matter, it is recommended to conclude a marriage contract, which stipulates that the acquired property is the property of one of the spouses or to distribute shares in it. This requires the consent of both spouses.