Principles on how to divide
Principles adopted by courts upon dividing divorcing couple’s property (and debts) are as follows:
- Divide “community property” equally between the spouses. (with some exceptions)
- Each spouse will keep his or her own “separate property”.
“Community property” is property or assets created and accumulated during a couple’s married years (to be exact, from when they lived together until when they began to live separately). This means that even if one spouse is a housewife with no income, he or she will still acquire half of bank deposits or other assets whose source is the income of the other spouse if they are made during the marriage.
On the other hand, “separate property” means property or assets created before marriage or after separation, or which comes to be owned by one spouse irrespective of marriage (e.g., inheritance or bestowal). Thus, bank savings, real estates or securities, for example, owned before marriage will not be subject to property division upon divorce.
Property obtained during marriage is presumed to be community property unless there is evidence which shows it is separate property.
Though the property and debt to be divided will be determined based on those existed at the time of separation, some properties (e.g., real estates and securities) are evaluated based on market values at the time of the last hearing of the proceeding.
– Retirement allowance
It is considered community property and usually is divided based on the amount of retirement allowance at the time of separation assuming that he/she retired at such time due to personal reasons, not company’s reasons.
– Housing loan
It will be divided based on the amount at the time of separation. You should be careful about the fact that a lending institution such as a bank basically do not allow a change in borrowers unless a new borrower is much richer than the former. So you will need to come up with a scheme to divide the whole property and debt equally instead of just dividing the loan in half.
– Shares in a company incorporated by a spouse
If it is incorporated before the marriage, it usually will not be subject to property division. If it is incorporated upon or after the marriage and the shares are under a spouse’s name, it will be subject to property division. Property under such company’s name usually will not be subject to property division.
Timing
A divorcing couple’s property is usually divided at the time of divorce whether divorce by agreement or by mediation or by lawsuit but this is not necessarily so. Thus, if you did not come to an agreement on property division at the time of divorce and wish to claim for it, you can file a mediation proceeding with a family court within 2 years from your divorce.