The globalisation of our world makes international relationships easier. This leads to more international marriages, which in turn leads to divorces with international aspects. These international aspects often take the divorcing parties by surprise.
When people go through the difficult time of a divorce they normally would prefer to arrange the divorce in their home country, where they are familiar with the laws. In an international marriage that is not always possible. An example. A French woman is married to a German man, they live in the Netherlands. Both parties want to arrange the consequences of the divorce in their own country. This is not possible. Based on the European Guideline which gives the rules on which Court is competent, the divorce had to be handled by the Dutch Courts. The Dutch Courts then decide on the law which will be applied to the divorce. So the first step to take in case of a pending divorce is to find a divorce lawyer or mediator.In The Netherlands couples do not need to give a ground for divorce to the courts. If you consider that you can no longer live with your partner for whatever reason, this is considered sufficient grounds for divorce in the Netherlands. The petition for divorce however will have to be filed in a court. Normally of course this is handled by your divorce lawyer.
The next stepto take is the make a (financial) plan. In case of divorce many things need to be considered, discussed and decided upon. Before you visit the divorce lawyer, mediator and/or financial planner, it is a good idea to draw up a list of assets or debts that need to be divided. The list would look something like this:
- Marriage contract, if applicable
- Value of the marital home (or maybe second home), if applicable
- Life insurance policies
- Value of the contents of the home
- Other assets such as cars
- Bank accounts, debts and other loans
- Current pension situation (recent pension statement)
- Income of both parties
- Monthly outgoings
Alimony for the ex-spouse as well as for the children is always a major point of discussion. Also the upbringing of the children is an important point. As a financial planner I wish to discuss the other financial issues that ones comes across in case of divorce.
If you are a home owner, it needs to be decided which of the two partners can stay in the house. If the home is communal property, the surplus value (value of the home over and above the amount of the mortgage) will have to be shared. The same applies for any other assets, depending on whether or not a marriage contract applies. The spouse that stays in the marital home will have to be able to afford the mortgage on his or her single income. And this mortgage will probably have to be increased to be able to pay off the other spouse. If you are a tax payer in The Netherlands, the interest of this increase will be tax deductible. If after the divorce the ex-spouse will continue to contribute towards the interest payments, this will remain a tax decuction for another two years. (The ex-spouse will have to declare the so called “eigen woning forfait”). Another point to consider is that any surplus value in the ex-marital home will affect future tax deductibility of the new home. Of course the value of life insurance policies need to be considered as well. So do not hesitate to seek the advice of a financial planner.
Any pension rights built up during the marriage will have to be split as well. Both ex-spouses have the right to half the pension built up during the marriage. Both ex-parters will be paid out directly by the pension fund or insurance companies when retirement sets in. This does not apply to the A.O.W. (Dutch State Pension). A.O.W. is paid out individually after the age of 65. (if you have not lived in The Netherlands since age 15, you will not be entitled to a full A.O.W.)
Once you and your spouse/partner have agreed on all points, the divorce court becomes a mere formality. In case one has not reached agreement on all points, the judge will have to decide. In case you do not agree with the judgement, you can appeal and ask the judge for a temporary arrangement. The judge will then decide on how much alimony will have to be paid and where the children will live for the time being.