Settlement of the BSM by the court at the request of one of the spouses

In previous articles:

• Marriage and business: how to protect assets from BSM risks
• Divorce and business: how to protect your business and investments from loss of assets

we have explained what the dissolution of marriage means and what options former spouses have when dividing property. However, the reality often looks different: emotions subside, the divorce is final and the issue of property remains open.

If the former spouses do not reach an agreement, the only way out is a court settlement of the community of spouses (BSM).

And here begins a completely different type of action.

Divorce ≠ BSM settlement

The divorce dissolves the marriage and the BSM is dissolved at the same time. However, this does not mean that the property is automatically divided.

Divorce resolves personal status, while a BSM settlement resolves the assets of the former spouses.

If the former spouses do not settle their property by agreement, they have 3 years from the final divorce judgment to file a petition with the court.

If no one submits a proposal within this time limit, the so-called. the legal presumption of settlement pursuant to Section 149(4) of the Civil Code :

• movable property used by one of the spouses is considered to be his/her property,
• other movables and immovable property shall become a joint ownership in the proportion of 1/2,
• other property rights shall be settled in the same way.

However, this presumption often creates new complications in practice (e.g. joint ownership of real estate between former spouses).

Therefore, delaying resolution is generally not worthwhile, especially when it comes to businesses, business holdings or investments whose value changes over time.

How are the proceedings in court?

Unlike divorce, this is a classic adversarial proceeding under the Code of Civil Procedure.

That means:

• there is a plaintiff and a defendant,
• the court decides the success and failure of the parties,
• the principle of proof applies, whoever claims something must also prove it,
• the costs of the proceedings shall also be decided.

The specificity of this procedure is that, although the parties formally act as plaintiff and defendant, both may:

• to propose which assets belong to the BSM,
• question the value of the property,
• to demand its bequest into his possession.

The court is not strictly bound by how the claimant proposes to divide the property. Its task is to arrange all the property relations between the former spouses in a comprehensive manner.

An important procedural peculiarity is that if the plaintiff withdraws the action, the court will only dismiss the proceedings with the consent of the other spouse. Thus, once the proceedings have been initiated, it is no longer a unilateral process.

What to include in the proposal?

All assets and liabilities belonging to the BSM must be included in the proposal.

The court settles the whole estate, not just part of it. It is not possible to “leave part of it aside” and deal with it later.

The BSM may include, for example:

• Property,
• motor vehicles,
• savings and investments,
• shares in companies (or their equity value),
• debts incurred during the marriage.

Each party must identify the evidence to prove:

• that the property belongs to the BSM,
• what it is worth,
• to whom it shall be commanded.

How is the value of the property determined?

Case law has long been based on the principle that:

• the status of the property on the date of dissolution of the BSM (i.e. on the date the divorce becomes final) is decisive, but
• its price is determined by its value at the time of settlement.

This means that if the value of the property increases in the meantime (e.g. real estate, business share), it can be settled at a higher value. However, there may also be a decrease in value.

The court always takes into account the specific circumstances of the case in order to avoid an undue disadvantage for one of the parties, in particular if the change in value is caused by the actions of one of the spouses after the dissolution of the BSM.

In the case of business shares, expert evidence is often involved and we will deal with this topic separately in a separate article.

How does the court decide?

In the judgment, the court usually:

• determines which property belongs to which spouse,
• or, where appropriate, decide on the creation of a co-ownership interest,
• order the other spouse to pay the compensatory share,
• may also impose an obligation to deliver a specific item.

The basic principle is equality of shares (1/2 – 1/2), unless the conditions for deviating from this principle are met (e.g. significantly different degree of care for the family, merit for the acquisition of the property, etc.).

Does the extent of those assets affect the court fee?

Unlike divorce, where the fee is fixed, a BSM settlement is a property proceeding.

A fixed fee of EUR 100 is payable when the action is brought. However, once the decision has become final, the court will charge a fee according to the value of the property being settled (usually a percentage of the base determined by the Court Fees Act).

The basis of the fee is the value of all property that was the subject of the settlement. As a rule, the fee liability is divided between the former spouses according to the assets ordered by the judgment.

Caution with high-value assets, this can be a significant sum to be taken into account when deciding whether to litigate.

Death of a spouse during the proceedings

The death of a party is not a ground for discontinuance of proceedings. The court shall continue the proceedings with the heirs of the deceased spouse.

This is also why it is not wise to postpone the settlement for a long time – the situation can become significantly more complicated.

Why is it not worth waiting?

Delaying settlement can lead to:

• appreciation or depreciation of the asset,
• deterioration of the evidentiary situation,
• complications in doing business,
• the creation of joint ownership, which creates further disputes.

The BSM settlement is not just a “make-up divorce”. It’s a major property decision that can affect your financial future for decades.

At Highgate Estate Vault, we can help you set up asset protection while your marriage is still in place, and in the event of a divorce, we will guide you through the entire process to make the settlement efficient, strategic and legally secure.

Book a consultation and get a tailor-made solution to protect your assets.