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The financial side of splitting up: tips from Elfin and Preferred Banking

Children & Family

When you’re in a healthy, loving relationship, how important is it to make agreements about splitting up? Why are the terms of your marriage or civil partnership relevant? And what happens to your home if you haven’t made agreements? In this video, Puck Landewé from Elfin – the biggest financial platform for women in the Netherlands and Belgium – speaks to Bobby LeFebre, Preferred Banking adviser.

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Puck: “36.5% of marriages in the Netherlands end in divorce. Divorce is extremely stressful in and of itself. But what’s shocking is that women’s purchasing power after divorce declines much more than men’s – by around 29%. While it increases again after the divorce, it never gets to the men’s level. That’s why you absolutely must know what could happen if you divorce or separate.”

You’re planning a divorce. How do you divide everything?

Bobby: “To an extent, that depends on how you got married: under a prenuptial agreement, in general community of property or in limited community of property. That’s the foundation of your agreements on how you’ll divide possessions if ever you split up.

  • A prenuptial agreement records specific arrangements about what belongs to who before or during the marriage.
  • In general community of property, everything is shared – including everything from before the marriage. That could be debts, like student loans, or property, such as a house that one of you owned before the marriage.
  • In limited community of property, everything that belonged to you before the marriage remains yours. Once you get married, everything you acquire together belongs to you both.”

So, is this all determined by the legal format of your marriage?

Bobby: “Yes, but that’s also the crux of the matter. Say you got married after signing a prenuptial agreement. During your marriage, you accrue more possessions – in whatever form that may be. If you don’t set out what belongs to who every year, there may be lots of disagreements when you have to divide those possessions. Why? Because nothing has been clearly recorded.”

And then what?

Bobby: “Things become difficult. It’s a good idea to agree on things when your relationship is going well. If you plan to get married, you intend to spend the rest of your lives together. Divorces and breakups can be very upsetting. Emotions can get in the way, so make clear agreements when things are going well.”

What if you want to split up, but don’t have enough income to make ends meet on your own?

Bobby: “It’s a sad fact of life that some people don’t get divorced because of money issues. In the Netherlands, you have a statutory obligation towards each other: a maintenance obligation.

The partner with the higher income pays partner maintenance. The duration of your marriage determines how long maintenance is paid. This is currently capped at five years, unless the two of you agreed it would be longer.”

What about if you have children?

Bobby: “You also have an obligation towards your children. This obligation takes the form of a plan based on your child’s financial needs and your financial capacity as parents. You can contribute equally or proportionally based on your income.

If the child is eighteen, their own financial situation becomes relevant, as they’ll be financially mature and liable to pay tax. If so, you won’t transfer maintenance payments to the partner who has custody, but directly to your child instead. You can also make individual agreements with your child.”

What about if you jointly own a home?

Bobby: “Several factors will be at play, assuming you bought a house together while you were married. It depends on what you both want to do with the house. If you want to stay in it and your partner wants to sell it, this can lead to disagreements.

If your partner says you can continue living there, you’ll have to see whether you can afford to. It’s very important to be prepared for that eventuality.”

What are your rights if you’re together but not married?

Bobby: “Legally speaking, there are no agreements if you’re not married and haven’t signed a cohabitation agreement. You may be entitled to certain things, though.

If you’ve lived together for over five years, you’re entitled to a partner’s pension if you’re registered as a partner with your partner’s pension fund. You’ll also need to make agreements about this if you’re planning to divorce or split up.”

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Children & Family

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