How does getting married affect your assets?

Being in a registered partnership is the same as being married in terms of the financial consequences. Only cohabitation, with or without a cohabitation agreement, doesn’t carry the same weight as marriage.

This property regime considers either partner’s assets as belonging to both partners. This applies to the assets that you and your partner have the moment you get married as well as any future assets. 

Gifts, inheritance and estates are usually exempted from this rule by means of an exclusion clause, which states that they belong only to the recipient. This prevents situations in which a gift, inheritance or estate must be divided between the partners in the event of a divorce.

Until 1 January 2018, marrying in a community of property was the norm in the Netherlands and automatically applied to a marriage if the partners did not set out a prenuptial agreement.

1. A community of property is suitable if you and your partner are in more or less the same financial position at the start of your marriage and if you remain married for life. In reality, however, many couples start on an unequal financial footing or get divorced.
2. The community of property also creates a community of debt. This means you and your partner are liable for each other’s debts, including student debt.
3. The community of property regime can be used to exploit people who are in a vulnerable position.

property regime by default. The limited community of property regime excludes premarital assets, gifts and inheritances from the community of property. This means that any property you have before you get married remains your own, just like any gifts, inheritance and estates you receive while you’re married. Any assets you and your partner gain together belong to you both.

But while this new system removes some snags in the old system, it doesn’t automatically make things simpler. For instance, it’s more likely that each spouse has different arrangements for their private assets. That all needs to be managed effectively, but many people fail to do so.

First, let’s define ‘premarital assets’: these are assets that did not already belong to both you and your partner prior to your marriage. For instance, if you bought a house together before you got married, this would be part of the community of property after you marry. If you each paid different amounts towards the purchase price before you married, such as a ratio of 70:30, ownership of the house would be 50:50 after you marry.

For a long time, people thought that this 50:50 ratio also applied to debts of partners who married without signing a prenuptial agreement. For example:  A couple living together buys a holiday home for €150,000. They jointly pay the first €100,000. Partner A pays the remaining €50,000, meaning partner B owes partner A €25,000.

If they marry, you’d expect partner A’s debts to halve. However, the Supreme Court has decided against this, so the debt remains unchanged. In other words: partner B still owes partner A €25,000.

The new rules on matrimonial regimes can have very complex repercussions. That’s why couples who intend on getting married should carefully research their current situation and look at what would change after they get married. If you conclude that the standard legal regime wouldn’t work for you and your partner, you can ask a notary to draw up a prenuptial agreement.

Many business owners choose to do this in order to shield their partner against claims from the business’s creditors. Similarly, you could think about things like: ‘What happens if the business does well? How much should my partner gain from that?’

With lots of choices to make and things to consider, it’s a good idea to seek advice from a notary. You should also take stock of your situation every five years and check that the agreements you made are still relevant.

What happens if one of you dies? Generally speaking, the inheritance tax burden on assets of couples with children who are born into the marriage is lower if those assets are distributed equally between the partners upon their death. Assets were often distributed equally under the previous community of property regime, less so under the new limited regime. You can solve this by drawing up a prenuptial agreement that follows the previous community of property regime.

The ‘final netting clause’ is another option. In this case, each partner’s assets are treated as private and any difference in the scale of the private assets is offset by a claim. This means that the partner with greater assets is indebted to the partner with lower assets to the extent that each partner’s assets are equal.

You and your partner may agree that the final netting clause applies only if your marriage ends due to death. This differs from a community of property regime, which sets out that assets must also be divided in the event of divorce.

1. The general assumption is that equal asset distribution leads to a lower inheritance tax burden. However, it’s always wise to check how this would affect your particular situation, taking into account things like the scale of the assets as well as your age and your partner’s age.
2. If an exclusion clause applies, you’ll need to find out whether equal asset distribution is an option.
3. Is equal asset distribution right for your situation? If you’re a couple with children from previous relationships, this is a point you need to consider. The marital community of property regime may lead to a shift in asset distribution and affect children’s claims to assets of your estate. Whatever you choose, it needs to be right for you.