Reduction of the Spouses’ Joint Property

Quick Summary

• Restricting the joint marital property is particularly useful when one spouse runs a business, has risky liabilities, or you plan to hold assets in only one spouse’s name.
• This is most often handled through a contract drawn up by a notary; in justified cases, a court may also limit or dissolve the joint marital property.
• The agreement should precisely define what will be joint property, what will be separate property, and how future assets will be handled.
• Registration in the Register of Marital Property Regime Documents provides greater protection against third parties, such as creditors.
• Using a template from the internet is not advisable when narrowing the scope of the joint marital property regime. Each property regime has different implications for the family, creditors, business operations, and a potential divorce.

Are you dealing with asset protection, divorce, or the division of joint marital property? Our attorneys will help you establish a secure process and prepare the necessary documentation for a notary or the court.

What is the joint property of spouses (SJM)?

Marital property (SJM) is automatically established upon marriage and includes most of the property you acquire during the marriage. Thus, marital property encompasses both movable and immovable property, income, and other assets, with the exception of gifts, inheritances, or property for personal use.

However, circumstances may arise during the marriage that could lead to a situation where it might be advantageous to narrow the scope of the joint marital property.

Narrowing the scope of the joint property allows you to exclude specific assets from the joint property or to adjust how assets acquired in the future will be handled. This can protect certain assets from business risks or simplify the division of assets in the event of a divorce.

By narrowing the scope of the joint property, you can gain greater certainty and control over the management of your assets in situations that could threaten your family’s financial stability.

When and Why to Limit the Joint Marital Property

Limiting the joint marital property (SJM) allows you to tailor your property arrangements to your specific needs. This may be necessary, in particular, when one spouse starts a business, has significant debts, or when both spouses are concerned about financial risks. To prevent the entire family’s assets from being jeopardized, you can agree to limit the joint marital property, which protects the non-entrepreneurial spouse and any accumulated assets. Similarly, you may decide to take this step, for example, if you are planning to purchase real estate and want it to remain the sole property of one of you.

If you are unsure what options for limiting the joint marital property the legal system offers, it is advisable to consult an expert. A lawyer can provide you with basic legal advice on the most appropriate course of action. To narrow the scope of the joint marital property itself, you can turn to a notary or, if necessary, to a court. The judicial route may be more complicated, but in some cases it is the only way to protect family assets from excessive risk.

A judicial reduction of the joint marital property occurs when serious grounds are met, and you must convince the court of their existence.

If you are unsure whether an agreement before a notary is sufficient in your case or whether you will need to resolve the joint marital property through the courts, we will be happy to help you assess your assets, debts, and risks and recommend a course of action that will protect your interests and your family’s assets.

How does the reduction of joint marital property take place?

The division of joint marital property (SJM) typically takes the form of a marital property agreement, which must be drawn up by a notary . A notary will help you draft an agreement that precisely specifies which specific assets or financial resources will be excluded from the joint property and will become the sole property of one of the spouses. It’s best not to look for a template for narrowing the scope of the joint property. It’s not that a template for narrowing the joint marital property doesn’t exist anywhere, but it is such a specific document that you should entrust it to a notary, even if it costs you some notary fees.

Restricting the joint property may apply to both existing assets and assets you are planning to acquire in the future. For example, if you’re planning to buy real estate and want only one of you to own it, this can be specified in the contract. This approach can be helpful in situations where one spouse runs a business or manages certain financial obligations that could jeopardize the family’s assets.

The process of limiting the joint marital property gives you control over how your assets will be managed and protected. A notarial deed ensures that the agreement is legally binding and that its terms will be respected not only between you but also vis-à-vis third parties, such as creditors. The cost of such a procedure is typically in the range of thousands of crowns. However, in this case, it is definitely worth entrusting the entire matter to a notary rather than relying on templates found online, because there is a lot at stake.

The joint marital property regime may also be dissolved by a court upon the petition of either spouse, provided there is a compelling reason for such a decision. This compelling reason is always the fact that:

• a creditor of the husband or wife demands security for their claim in an amount exceeding the value of what belongs exclusively to that spouse,
• a spouse can be considered wasteful,
• the spouse consistently or repeatedly takes on unreasonable risks.

It may also be deemed a compelling reason if a spouse has started a business or has become a partner with unlimited liability in a legal entity.

What are the benefits of limiting the joint marital property (SJM)?

A narrowed marital property regime (SJM) offers practical benefits, particularly in situations where one spouse runs a business or has high-risk liabilities. By narrowing the regime, you can protect family assets so that, in the event of debt or business failures on the part of one spouse, the assets of both spouses are not at risk. This gives you greater control over both your financial obligations and your assets.

When Should You Choose to Expand the Joint Marital Property (SJM)?

Adjusting the scope of the marital property regime is not just about protecting assets— sometimes it can be advantageous to expand the marital property regime. This means that assets that would otherwise belong to only one of you become jointly owned. This can happen, for example, if one spouse inherits real estate or receives a valuable gift that they wish to include in the joint marital property. Expanding the joint marital property can then offer advantages in situations where both spouses wish to share responsibility for managing and using such assets.

When expanding the joint marital property, it is recommended to consider the impact this would have on any potential obligations and financial liabilities of both spouses. This allows you to tailor your property arrangements to your family situation and future plans.

Practical Advice and Tips

An agreement to narrow or expand the joint marital property should include precise information about which assets will remain joint property and which will be the exclusive property of one spouse. This can help you avoid disputes and ambiguities in the event of, for example, a divorce or financial complications. Don’t forget to specify how to handle assets you will acquire in the future—for example, if you plan to purchase real estate or make an investment.

Clarify your main goal in advance: protecting family assets, simplifying financial management, or aligning asset ownership with your future plans. When your rights and obligations are clearly defined, you gain greater control over your property relationships and the assurance that your assets will be managed according to your wishes.

The fee for limiting the joint marital property (notary fees) is typically calculated as a percentage of the value of the property in question. If the agreement is to be registered in the Register of Marital Property Regime Documents (which is recommended, as the agreement is then enforceable against third parties), an additional fee must be taken into account.

An Example from Our Law Practice

Our regular clients, Mr. Jakub and Ms. Hanka, turned to the law firm Dostupný advokát. They have been married for ten years and are raising two children together. Jakub is a successful entrepreneur whom we helped establish a construction company, while Hanka works as an elementary school teacher. However, Jakub’s business has expanded in recent years, which also brings greater risks—he is investing in new projects and financing some of them with loans.

Both spouses were concerned that any debts or financial problems the company might face could jeopardize their joint property. Any business failures on Jakub’s part would have a negative impact on the family and on the assets they had accumulated together with Hanka during their marriage.

The couple therefore sought advice on how to ensure that certain assets, such as their family home and savings, would remain Hanka’s separate property, while Jakub would contribute only his personal expenses and necessary business-related expenses to the joint marital property. We recommended that they limit the scope of their joint marital property and discussed possible wording for the agreement. At the same time, we facilitated the signing of the agreement before a notary. In this way, we helped them protect their family assets while ensuring that Jakub could continue his business with minimal risk to the family budget.

Summary

Restricting the joint marital property is a practical tool for adjusting property relations within a marriage to suit the family’s actual needs. It is most commonly used when one spouse runs a business, when there is a risk of debt, when purchasing real estate, or as a preventive measure against future disputes in the event of a divorce. The basis for this is a contract in the form of a notarial deed, which precisely specifies what will be considered joint property and what will belong solely to one spouse. In some cases, a court may also decide on the restriction or dissolution of the joint marital property.

It is crucial not to underestimate the importance of preparation. Spouses should clarify in advance which assets they wish to protect, what obligations exist, and whether the change should also apply to future assets. In cases involving business ventures, debts, or real estate, we recommend consulting with an attorney before visiting a notary. A well-structured restriction of the joint marital property regime can protect family assets, simplify future settlements, and prevent disputes that could otherwise cost much more time and money.