What to do if you want to gift to your wife real estate to stand separate from your matrimonial property? Can property be transferred to your husband and children? And what if your parents wish to donate property to you alone? The following article answers such and similar questions frequently asked by our clients regarding property donation between spouses. It also mentions the most common errors that our clients make; read further to avoid them yourself.
A deed of donation is a legal document binding the donor to transfer the ownership of a particular object to the donee(s), who, in order to complete the legal act, must consent to the donation
It’s also possible to donate without a document in writing – both parties enter into a deed of donation simply by handing over the gift and accepting it. However, this article discusses property donation, in which case a written deed with attested signatures is always required.
Many of our clients wish to donate real estate to their spouse. However, this is complicated by matrimonial property. What are the things to bear in mind here?
Matrimonial property, also known as marital property or community property, refers to most property acquired after the marriage by either one of the couple. It means that whatever one spouse obtains equally belongs to the other. This includes the car that the husband bought after the wedding as well as his salary. Debts also represent an unwelcome part of marital property.
Even a trivial error in the property transfer application can cost you the flat, not to mention a mistake in the deed of donation. Play it safe and ensure that the donation to someone close to you will go exactly as planned.
Following from this, a real estate donation between spouses is possible only if it isn’t a part of matrimonial property. However, an alternative exists: to reduce marital property by means of a notarial record. The real estate thus excluded from community property may then be donated.
Reducing matrimonial property, or, in legal terms, the contract of statutory matrimonial property regime modification, can be signed if a property is to belong to a sole spouse, and may encompass a donation as well as various other situations.
If the couple wishes to donate property between them in this way, they need to record their contract of reducing community property at the notary.
Let’s consider a model situation: A husband seeks to gift to his wife a part of a separately owned flat that he had purchased before the wedding. He has two options: To enter into a deed of donation with his wife and transfer a portion of the flat to her. Thus, after the new ownership rights are transferred at the Land Register, the flat will be owned by both of the couple in the regime of proportionate joint ownership.
Or, he and his wife may sign a postnuptial agreement, in which they will agree that the matrimonial property will include the flat. Subsequentially, they’ll sign the notarial record upon which the ownership rights will be transferred at the Land Register.Gifting property to a third party.
Unless the married couple choose another method of property transfer, e.g., a purchase agreement with a third party, they must donate property jointly, that is, they both must consent.
Any person may become the donee – most frequently, this will be the children or parents. Read this article and familiarize yourself with what to bear in mind when gifting property.
The whole real estate or its part can be donated. In the latter case, an ownership share will be gifted – for instance, parents may wish to donate to their children an ownership share of their house equal to one half, while retaining the other half as a part of their marital property.
In 2014, the Czech civil code introduced the possibility to gift give real estate to become a part of marital property. Previously, any real estate to be counted among matrimonial property had to be purchased. Nowadays, however, you can, e.g., donate property to your daughter and her husband so that they share it in the regime of community property. You can do so by explicitly stating in the deed of donation that the respective party acquire the realty as a part of their community property. Moreover, you must include this statement in the application with the Land Register when transferring the ownership rights.
If a married couple has reduced their matrimonial property, they may obtain real estate only in the regime of proportional joint ownership, where each of the couple will hold one half of the realty, and the Land Registry will record the ownership thus.
The couple manages such property jointly, also equally sharing the obligations stemming from it, e.g., repair costs or settling a debt connected with it – in this case, the creditor is entitled to demand either member of the couple to pay up in full. Any spouse may treat their share in any way they deem as fit; if the wife wanted to make things difficult for her husband, she could sell her share to a third party without his consent. The property is managed according to the ratio of shares, and common issues are decided by the majority. If, however, the shares are equal, such management may prove difficult unless both spouses come to an agreement. If they are unable to, they will have to take the matter to the court.
The errors that our clients often make when gift giving property
Czech law defines a close person thus:
“A close person is a relative in the direct line, sibling and spouse or a partner under another statute governing registered partnership (hereinafter a “partner”); other persons in a familial or similar relationship shall, with regard to each other, be considered to be close persons if the harm suffered by one of them is perceived as his own harm by the other. Persons related by affinity and persons permanently living together are also presumed to be close persons.”
you would have to meet the condition of greater closeness – see the quotation above: If that person suffered a harm, you would perceive it as your own.
Tip: Have you managed to complete the transfer? An extract from the Land Register will confirm it.
An important fact to bear in mind when donating property between spouses is that any property gifted to a spouse will remain in their possession after the eventual divorce; in other words, it will not be subject to matrimonial property division during the divorce suit.
What happens if you’re getting divorced while living in a house separately owned by your spouse? Such a house doesn’t fall into marital property and won’t be subject to property settlement during or after the divorce. Quite often, however, one of the couple invests a considerable sum in the house. During the property settlement, they may raise a claim to settle property investments, i.e., to get back the money spent on the real estate. If the other spouse challenges this, they must provide evidence (ideally the receipts, invoices, etc.) that the money was indeed invested thus.
If you find yourself in one of the above situations, for instance, if you’re considering gifting property to a spouse, we’ll gladly assist you. We’ll tailor the deed of donation to your needs; furthermore, we’ll apply for the transfer of the property at the Land Register and advise whether it might be to your benefit to enter into a postnuptial agreement (or a prenuptial agreement). And, last but not least, we’ll gladly provide counsel regarding property settlement after the divorce or the eventual reimbursement for investments in the spouse’s separate property.
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