How should you divide your assets when divorcing?
You’re getting divorced and you and your husband have jointly acquired assets? You need to liquidate your matrimonial regime and then divide up the various estates.
How to divide your assets during a divorce!
What is the division of joint property?
Once you have liquidated your matrimonial regime (inter-spousal rewards and receivable settlement), you know the value and consistency of your joint assets. Then comes the sharing stage, i.e. your joint assets are divided in half between you and your spouse.
If you divorce by mutual consent, you will proceed to an amicable division, in practice settling the fate of your assets in a draft final agreement that settles the consequences of your divorce, in particular the liquidation and division of your community property. In the agreement submitted, you can agree to an unequal distribution of community property.
In other cases of divorce (accepted divorce, divorce for definitive alteration of the marital bond, divorce for fault), the community property liquidation and partition agreement can be drawn up during the divorce proceedings, so you don’t need to send it in when you file your petition.
A notary will be required if the liquidation and partition involves property subject to land registration.
How do you determine who gets what?
There are two ways of dividing a joint estate:
1. Sell everything and split the proceeds
You can agree to sell all or part of the property you own jointly, and then divide the proceeds between you.
If you wish to adopt this procedure, we advise you to sell and divide the money verbally before divorcing. Doing so will enable you to avoid paying tax on the division of 2.5% of the value of the shared assets.
2. Don’t sell and allocate assets in kind
You can also decide in your division agreement that certain assets will be allocated either to you or to your spouse.
However, if there is an imbalance in the value of the property allocated to each spouse, the spouse who receives the property will have to pay the other spouse a balance, i.e. a sum of money corresponding to the imbalance.
By paying a balance to your spouse, you are in effect buying your spouse’s rights to the property.
You can benefit from preferential allocation of certain assets
On certain assets, you can benefit from a preferential allocation, i.e. you have a right of priority over your spouse, to be allocated such or such assets.
For example, you can ask for preferential allocation of the following assets:
- any business or part of a business in which you are the manager;
- the right to the lease of premises for professional use effectively used for the exercise of your profession;
- the dwelling or residential lease for the premises used as your home.
Of course, this right of preferential allocation does not exempt you from paying a balance if your spouse receives less than you.
What if you can’t agree on the division?
If you are unable to agree on the division of assets, you will have to proceed with a judicial division of the community.
If you are unable to reach an agreement in the divorce agreement, the judge will order the liquidation and division of your assets when issuing the divorce decree, based on your respective claims.
Using an unequal division to pay the compensatory allowance
When divorcing, the division of your assets may be affected by the payment of compensatory allowance, the aim of which is to compensate for the disparity in living conditions created by the breakdown of the marriage.
If you have to pay a compensatory allowance to your spouse, you can take advantage of the division.
By divorcing, you agree both to the division of the community and to the settlement of the compensatory allowance, so you can proceed with an unequal division, which is in fact a way of settling the compensatory allowance.
How much does sharing cost?
In the event of a division, you will be liable for 2.5% of the net amount to be divided.
Note that you cannot deduct the balance paid from this net amount, as this is a division of inheritances or marital communities (article 748 of the French General Tax Code). Of course, in exchange, the balancing payment subject to division duties will not constitute a taxable capital gain.
In addition to the division tax, you must add the real estate security contribution at a rate of 0.10% of the value of the shared property.
Notary’s fees in the case of real estate
You will need to add notary fees to the division tax.
Note that if you’re not sharing any real estate, you don’t need to go before a notary. The lawyer handling the divorce proceedings can also handle the division of your joint property.
The notary’s fees include emoluments and disbursements.
For the emoluments, a percentage will be applied according to the value of the property to be divided. VAT must also be added. The rate is applied by tranche according to the value of the property.
- Up to €6,500: 4.931%.
- From €6,500 to €17,000: 2.034%.
- From €17,000 to €60,000: 1.356%.
- Above €60,000: 1.017%.
Disbursements include fees advanced by the notary for drafting deeds and formalities. You should expect to pay between €200 and €500 in disbursements.
You are getting divorced and you and your husband have jointly acquired assets? You can use AGN Avocats’ online divorce procedure! You need to liquidate your matrimonial property and then divide the various assets. You and your spouse can come to an agreement on how to divide the assets, but if you run into difficulties, don’t hesitate to contact an AGN lawyer in your area, who can advise you on how to divide your assets.