Intimate Partnerships: Sharing Extensions Beyond Happy and Sad Moments
In Germany, when it comes to income tax, the property status of couples does not play a fundamental role. They can choose between joint assessment (marital split) and individual assessment. However, when it comes to property, a joint estate is created, and both partners can only dispose of it jointly, with some exceptions for sole disposal authority.
One of the standard marital property regimes in Germany is the acquisition community, not the community of assets as many might think. Yet, couples can choose to form a property community by concluding a marriage contract with a notary, which can provide significant protection to the surviving spouse.
The community of accrued gains, or Zugewinngemeinschaft, is a common choice in such a property community. It fosters financial sharing and protection for spouses, especially the economically weaker one. Both spouses share equally in the increase of their combined assets acquired during the marriage, regardless of who earned what, promoting financial fairness and partnership. Upon divorce or death, the accrued gains are equalized between spouses, which can protect the economically weaker spouse.
However, each spouse may have less control over their individual earnings and assets acquired during the marriage, as these become jointly owned as accrued gains. For business owners, community of accrued gains can create significant risks or liquidity problems, as business assets might have to be partially shared or divided upon divorce without protective agreements. Complexities arise in asset management, requiring clear agreements to avoid disputes.
Alternatives via marriage contracts allow adjustment but must be carefully prepared to avoid invalidation. Excluding community of accrued gains in a marriage contract offers protection of business assets from being divided or offset against spousal claims, clear legal and financial boundaries, and customized arrangements on spousal maintenance and pension equalization. However, establishing such contracts requires early planning and negotiation well before marriage, independent legal advice for both spouses, and transparency and equal bargaining power during contract drafting.
German inheritance law also interacts with community property rules, influencing how estates are divided. For example, a surviving spouse receives part of the estate plus a share of accrued gains if no contract excludes this regime. This underscores the importance of marital property arrangements in estate and inheritance planning.
Approximately every second adult person in Germany is married. A marital property regime is automatically established with marriage, and the community of assets is a less common choice. In joint assessment, all incomes of both parties are combined and a joint income tax tariff is applied. In a community of assets, both spouses' property, acquired before and during the marriage, is generally joint property. In a community of gains, property earned during the marriage is divided equally in the event of a divorce (equalization of gains). A property community in Germany is not automatically created with marriage; it must be explicitly agreed upon in a marriage contract with a notary. Both spouses are generally jointly liable for both assets and debts in a community of assets. Certain assets can be excluded from the joint estate in a community of assets, defined as separate property. Separate property remains with the person who brought it into the marriage in the event of a divorce.
References: [1] German Marriage Contract Law [2] German Property Law [5] German Inheritance Law
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