Definition and significance of final assets
Final assets are a central concept in German family law and, in the context of matrimonial property law, refer to the asset status of an individual at the end of the matrimonial property regime, typically at the termination of the marriage through divorce or the death of a spouse. The final assets play a decisive role in the calculation of the equalization of accrued gains, which is prescribed in the statutory matrimonial property regime of community of accrued gains.
The legal basis for this is, in particular, Section 1375 of the German Civil Code (BGB). The final assets are crucially used to ensure economically fair conditions between spouses after the dissolution of the matrimonial property regime.
Statutory regulation of final assets
Equalization of accrued gains and final assets
In the community of accrued gains, the assets of the spouses remain separate during the marriage. When the marriage ends, the accrued gain achieved during the marriage is equalized, with the final assets being decisive:
- Initial assets: The assets of each spouse at the commencement of the matrimonial property regime (Section 1374 BGB).
- Final assets: The asset balance of each spouse at the end of the matrimonial property regime (Section 1375 BGB).
- Accrued gain: The difference between final assets and initial assets.
Statutory definition according to Section 1375 BGB
Final assets are understood as the assets of a spouse after deducting liabilities at the end of the matrimonial property regime. Assets comprise the totality of economic values owned by the person, including movable and immovable property, claims, rights, and participations.
According to Section 1375 (2) BGB, gifts and unlawful asset shifts are added to the final assets under certain conditions, or deductions are denied (addition and imputation rules). The aim is to prevent manipulation and to allow for a fair distribution of assets.
Composition and calculation of final assets
Reference date for valuation
The final assets are generally determined at the time the divorce petition is served or at the time the property regime is otherwise terminated. For the valuation, the current market value of the assets is decisive.
Additions and subtractions to the final assets
The following are included in the final assets:
- Real estate (plots, condominium units)
- Cash, bank balances
- Securities, shares, participations
- Motor vehicles
- Household contents (depending on the individual case and value)
- Claims and rights
- Life and pension insurance policies with surrender value
The following are also to be taken into account:
- Gratuitous transfers between third parties and a spouse within the last ten years (before the end of the matrimonial property regime).
- Asset shifts carried out with the intent to disadvantage the other spouse.
Liabilities
Debts and other liabilities are to be deducted from the final assets. These include, for example:
- Credits
- Loans
- Mortgages
- Tax debts
However, debts that were taken on solely as a sham or were manipulative for the purpose of asset reduction may, under certain circumstances, not be deductible (Section 1375 (2) BGB).
Special cases and particularities
Negative final assets
If the sum of liabilities exceeds the assets, a negative final asset balance may also exist. This is fully taken into account in the calculation of the equalization of accrued gains.
Exclusion of manipulations
To prevent the shifting of assets to the detriment of the spouse entitled to compensation, the law stipulates the addition (Section 1375 (2) BGB) of certain offshoring and gratuitous transfers of assets to the final assets. Wasteful spending of assets or improper assumption of debts are likewise not taken into account to the disadvantage of the other spouse.
Matrimonial contract provisions
A marriage contract can modify or even entirely exclude the calculation of final assets. However, as a rule, the statutory regulations are applied unless deviating agreements exist.
Procedural aspects and proof of final assets
Obligations to cooperate and provide information
Both spouses are obliged to provide complete information about their final assets (Section 1379 BGB). This includes the submission of evidence, account statements, real estate valuation reports, and other documents required for valuation.
Disputes and judicial valuation
If, in the course of the procedure for equalization of accrued gains, there are differing statements or disputes about the existence, valuation, or scope of the final assets, the competent family court decides. Expert opinions are often important, particularly in the case of real estate or participations.
Legal consequences and significance within the equalization of accrued gains
The final assets represent one of the two key calculation values for the equalization of accrued gains. After deduction of the initial assets, the accrued gain of each spouse is calculated. The spouse with the lower accrued gain can claim half of the difference (equalization of accrued gains) pursuant to Section 1378 BGB.
This regulation ensures that the increase in assets jointly acquired during the marriage is evenly distributed, with the final assets constituting the decisive value at the end of the marriage.
Literature and further references
- German Civil Code (BGB), in particular Sections 1363 ff., 1375 BGB.
- Palandt, German Civil Code. Commentary, current edition.
- Kogel/Brudermüller, Equalization of Accrued Gains, Commentary on Sections 1372-1390 BGB.
- Handbook of Family Law, current edition.
Summary
Final assets are a central concept of German family law and form an essential basis for the implementation of the equalization of accrued gains in the statutory property regime of community of accrued gains. It comprises the assets available at the end of the property regime minus the liabilities, with comprehensive statutory rules regarding the consideration and addition of certain asset movements. Within the context of divorce or after the death of a spouse, the correct determination of the final assets is an indispensable step towards fair asset distribution.
Frequently asked questions
How are final assets determined in the community of accrued gains under German law?
Final assets are determined in the context of the statutory matrimonial property regime of community of accrued gains pursuant to Section 1375 BGB. For this purpose, the assets of each spouse are recorded on the key date of the termination of the property regime (e.g., by divorce, death, or change of property regime). The decisive point in time is when the property regime ends. The final assets include all assets belonging to a spouse at that time, less existing liabilities. Assets comprise both movable and immovable property, claims, bank balances, securities, company participations, and other financial rights. As a rule, the fair market value on the key date applies for the valuation. It must be noted that certain asset shifts, especially disloyal reductions in assets (e.g., gifts to third parties shortly before the key date or concealing assets), may be added to the final assets in accordance with Section 1375 (2) BGB. Inheritances and gifts received during marriage are also treated in a special way, as they are initially added to the initial assets for the calculation of accrued gain and thus remain value-neutral.
What role do debts and liabilities play in the final assets?
In calculating the final assets, the existing debts and liabilities of each spouse are taken into account pursuant to Section 1375 (1) BGB after deduction from the gross assets. The lawfulness and value of the liabilities on the key date are decisive. These include, for example, private loans, mortgage loans, outstanding invoices, and other legally binding payment obligations. Debts incurred in connection with asset losses due to disloyal conduct can be deducted from the final assets unless they fall under Section 1375 (2) BGB and are thus treated as abusive reductions in assets. Not deductible are fictitious liabilities or liabilities outside the spouse’s actual economic circumstances.
To what extent are gifts or inheritances taken into account in the final assets?
Gifts and inheritances received by a spouse during the marriage are added to the initial assets in accordance with Section 1374 (2) BGB, even if they were actually acquired only after the marriage began. This means that gains from gifts and inheritances are generally excluded from the equalization of accrued gains, since they are treated as neutral in the calculation of the accrued gain. Nevertheless, the current value as of the key date remains in the final assets and may—especially in the case of an increase in value—lead to higher final assets. It is also important to consider how investment income, rental income, or other uses derived from gifts or inheritances during the marriage are handled; these are not added to the initial assets but constitute accrued gain.
How are business shares or complex assets valued in the final assets?
Business shares and other complex assets are valued in the final assets at their usual market value on the relevant key date. In particular, this can present significant difficulties with non-listed companies or specific assets (such as patents, copyrights, or company participations), and usually requires an expert opinion. In case of dispute, the family court decides on the value to be used. When valuing businesses, established valuation methods such as the income approach, discounted cash flow method, or comparable values are used. Any sale restrictions, provisions in articles of association, or limited marketability are taken into account in the valuation.
What information and disclosure obligations exist regarding final assets?
Both spouses are obliged to fully and truthfully disclose their final assets within the context of equalization of accrued gains (§ 1379 BGB). Each spouse may require the other to provide detailed information on the assets present at the time the divorce petition became pending (or in the case of other grounds for the termination of the property regime, on the corresponding date). The disclosure obligation includes all assets and liabilities, including supporting evidence and documents such as account statements, securities accounts, land register excerpts, and valuations of business shares. Intentional or grossly negligent breaches of the obligation to provide information may result in claims for damages by the other spouse.
How are asset shifts shortly before the end of the property regime handled?
If, between separation and the formal termination of the property regime, assets are moved or allegedly concealed by one spouse, the correction provisions of Section 1375 (2) BGB apply. Accordingly, asset reductions made with the intent to disadvantage the other spouse (e.g., gratuitous transfers, selling off assets cheaply, or concealed assets) are added to the final assets. It is a prerequisite that an intention to disadvantage can be proven. Also, transfers due to marital causes or other transfers to third parties may be considered, unless a marital agreement or compensatory consideration exists. The court may, based on this, make corrections to the final assets to ensure fair distribution in accordance with the law.
