Term and legal classification of the equalization value
The term equalization value is a central concept in German family law, especially in the context of pension equalization during divorces. The equalization value describes the amount or entitlement that is to be balanced between the spouses when dividing the pension entitlements acquired during the marriage. The legal basis is primarily the Pension Equalization Act (VersAusglG) as well as relevant provisions in the German Civil Code (BGB). The equalization value is decisive for the fair and equal distribution of pension entitlements and similar benefits.
Legal basis of the equalization value
Pension Equalization Act (VersAusglG)
The Pension Equalization Act regulates the details of pension equalization, which is automatically carried out as part of the divorce proceedings. According to § 1 VersAusglG, it is established for each spouse which entitlements were acquired during the marriage. Based on these findings, the equalization value for each individual entitlement is calculated.
Definition and purpose
The equalization value represents the amount that is transferred to the spouse entitled to compensation as part of pension equalization. The aim is to divide the pension entitlements acquired together during the marriage (e.g., statutory, occupational, or private pension entitlements) equally between the spouses in the event of divorce, thereby ensuring independent social security.
Calculation of the equalization value
Valuation of equalization rights
The starting point is the determination of pension entitlements acquired during the marriage, separately for each spouse. Statutory (e.g., statutory pension insurance), occupational, and private pension claims are considered. The pension provider communicates, in accordance with § 5 VersAusglG, the value of the entitlement at the end of the marriage. This so-called ‘pension amount’ or capital value forms the basis for determining the equalization value.
Principle of equal division
According to § 1 para. 1 VersAusglG, in principle, half of the determined value is set as the equalization value. This principle of equal division aims at a fair distribution of the entitlements acquired during the marriage. The specific equalization value therefore results from:
- the marital period value of the entitlements
- the application of the principle of equal division.
Individual particularities and modifications
In certain cases, a calculation deviating from the half division may occur. According to §§ 18 ff. VersAusglG, so-called external divisions can be carried out, whereby a capital amount (the equalization value) is transferred to an external pension provider. Furthermore, deviations from the standard calculation are possible in the case of minor equalization values (§ 18 VersAusglG) or unjust hardship (§ 27 VersAusglG).
Legal consequences of the equalization value
Transfer and establishment of new entitlements
The determined equalization value is transferred to the entitled spouse in the form of an independent entitlement. For this purpose, the family court, by order, initiates the adjustment or reassessment of pension accounts with the pension providers. Depending on the provider, the valuation takes place as a capital value, pension amount, or point value.
Modification and exclusion of the equalization value
The court may, upon application or ex officio, reduce, adjust, or entirely exclude the equalization value if exceptional circumstances, such as gross unfairness or contractual arrangements between the spouses, justify this. The latter can be effected, for example, by notarized divorce agreements or due to statutory exclusion or limitation provisions.
Case law and practical application
Case law in the area of pension equalization regularly clarifies the application and calculation of the equalization value. This particularly concerns questions about the end of the marital period, the valuation of non-standardized pension entitlements, the handling of differential pensions, or the impact of special conditions in company pension schemes.
Practical significance
For those affected, the equalization value is decisive, as it determines the amount of pension points, capital sums, or entitlements transferred, and how these affect future retirement provision. Especially in cases of differing employment histories, the equalization value serves to level the differences and provide social security for the economically weaker partner.
Summary
Der equalization value is a key element in German pension equalization law and determines the value that leads to the distribution of pension entitlements acquired during the marriage in the event of separation and divorce. Its calculation is based on statutory provisions of the Pension Equalization Act and essential legal principles such as the principle of equal division and the reference date principle. Deviations are possible in individual cases, for example in the case of insignificance, gross unfairness, or by individual agreements between the spouses. The correct determination of the equalization value ensures fair and socially balanced retirement provision after divorce.
Frequently asked questions
What legal frameworks must be considered in the calculation of the equalization value?
When assessing the equalization value, the requirements of the German Civil Code (BGB) as well as, where applicable, special legal provisions must be taken into account. In the context of the accrued gains equalization under §§ 1373 ff. BGB, the equalization value is the result of the difference in asset increases of the spouses during the marriage. It is crucial that both the initial and final assets are precisely determined as of the respective key date, taking into account any privileged gifts, inheritances, and prior equalization payments. The assessment is subject to the strict principle of equality, allowing individual agreements only if they do not circumvent mandatory legal requirements and do not result in immoral disadvantage. Additional requirements may arise from family court decisions or notarized agreements, whereby legal certainty and the verifiability of the calculation basis must always be ensured.
What role does the timing of the calculation play in the equalization value?
The legal relevance of the calculation date is significant, as the equalization value can only be determined based on the property conditions at the legally specified reference dates. In the case of accrued gains equalization, these are generally the date of marriage (initial assets) and the crucial date of the pending divorce application (final assets). In other contexts, such as pension equalization under §§ 1587 ff. BGB (former version), the relevant valuation and reference dates are precisely regulated in the respective laws. Deviations from the reference dates are only possible in cases expressly determined by law or through valid individual agreements.
Are there tax implications associated with the equalization value?
From a legal perspective, the tax treatment of the equalization value is strictly to be distinguished from the property law arrangement. In principle, equalization payments made within the context of accrued gains or pension equalization are exempt from income tax according to § 5 ErbStG and § 3 No. 55 EStG. However, it must be checked whether special circumstances—such as the transfer of real estate or business shares—trigger further tax consequences, for example regarding real estate transfer tax or gift tax, if the equalization value is realized through real division. The formation of a civil law title by court order or settlement does not in itself automatically lead to tax recognition.
How can the equalization value be challenged or reviewed?
The legally determined equalization value can be reviewed or challenged by the affected party if there are indications of incorrect or incomplete information. In family law proceedings, reciprocal duties of disclosure and documentation apply as per § 1379 BGB. In the case of judicial clarification, the court’s powers encompass a complete review of the valuation, with expert opinions obtainable in accordance with § 144 ZPO. In substance, the burden of proof for the alleged (non-)existence of certain positions lies with the respective claimant or respondent. Appeal and complaint are available as legal remedies against decisions from the first instance.
What legal limitations exist for contractual arrangements regarding the equalization value?
Contractual provisions concerning the equalization value are subject to strict limits of private autonomy. According to § 1408 BGB, marriage contracts or out-of-court settlements may be concluded, but these are invalid on grounds of immorality (§ 138 BGB) if they result in a unilateral, excessive disadvantage to one spouse. Such cases are particularly scrutinized if one spouse waives the equalization value entirely or to a considerable extent, which can only be validly agreed upon under certain conditions—such as mutual security and legal advice. Courts review contractual freedom in the interest of protecting structurally disadvantaged parties.
Are there specific considerations regarding debts in the equalization value?
The consideration of liabilities is a key legal criterion when determining the equalization value. Under §§ 1374 and 1375 BGB, both the initial and final assets must be adjusted for existing debts. Only actual liabilities, not potential or contingent risks, are to be taken into account. Improper shifting of debts shortly before the relevant key date can be considered as disloyal reduction of assets under § 1375 para. 2 BGB and corrected. Moreover, liabilities incurred with the specific intent to reduce the equalization value must be treated differently if abuse of law can be proven.
How is the equalization value legally treated in the presence of international elements?
International ties, such as cross-border marriages or assets abroad, bring special legal challenges in determining the equalization value. The key issue is the determination of applicable law, which is regularly governed by the EU Matrimonial Property Regulation (Regulation (EU) 2016/1103) and national conflict-of-law rules. Assets located abroad may be subject to different valuation methods and may require the recognition and enforcement of decisions in the relevant foreign country according to international treaties or the Brussels I Regulation. Tax implications can also arise from the varying treatment of the equalization value in the country of residence, necessitating a comprehensive legal review.
