Division of joint property of spouses and division of inheritance

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IV 2022

Complementary inheritance department

If the inheritance is shared by several people, dividing the inheritance tends to distribute the elements of the inheritance among individuals.

The division of the inheritance may take place either by agreement between all heirs, or by a court order upon request any of the heirs. The inheritance department may therefore be contractual or judicial. The judicial division of the estate should cover the entire estate. However, for important reasons, it may be limited to a portion of the inheritance. The notional division of the estate may cover the entire estate or be limited to a part of the estate.


When can there be a judicial partial division of the estate?

A judicial partial division of the inheritance may occur, in particular, from this because an enterprise is part of the inheritance. Pursuant to the resolution of the Supreme Court of September 22, 1977 (file reference number III CZP 72/77), in the event of important reasons to limit the division of joint property to a part of this property, the court may only include a decision on this matter in a division judgment concluding the proceedings in case.


What is a Supplementary Inheritance Department and when can it be done?

The supplementary division of the estate is a section that is made after dividing the estate in part, if the estate department did not cover all its components. The omitted components do not cease to be joint property, so it is worth making a supplementary division of the inheritance. Pursuant to the resolution of the Supreme Court of August 28, 1986 (file reference number III CZP 47/86), if it turns out that, for any reason, a legally valid decision on the division of the joint property did not cover all essential components of the joint property, each of the ex-spouses may apply in separate proceedings for a supplementary division as to the components that have not been included in the division ruling. Moreover, the joint assets of the ex-spouses not submitted for division or omitted by the Court in a legally binding decision for division do not cease to be joint property; they may therefore be divided by agreement or by a court ruling (supplementary division) (decision of the Supreme Court of July 14, 1983, file reference number IV CR 282/83). The above was confirmed by the decision of the Supreme Court of June 30, 2021 (file reference number I CSKP 133/21), indicating that if a specific asset was part of the joint property and was not covered by the contractual division of this property combined with the division of the deceased's estate the spouse, each of the heirs may request a supplementary judicial division of the estate covering this component.

Each of the heirs may apply for a supplementary division of the estate.


III 2022

Reimbursement of expenses and expenditures before and after the division of the joint property

The rules of making settlements by spouses in respect of expenses and expenditure made from joint property to personal property of each of them and made from personal property to joint property are governed by Art. 45 k.r.o. As provided by the law, each spouse should reimburse the expenses and outlays made from the joint property on his personal property, with the exception of expenses and expenses necessary for income-generating property. The spouse may request reimbursement of expenses and expenses that he made from his personal property to the joint property. However, you can not claim the reimbursement of expenses and expenditures used to meet the needs of the family, unless they increased the value of the property at the time of cessation of commonality.

Pursuant to Art. 45 § 2 of the Family and Guardianship Code, the return is made when the joint property is divided. The court may, however, order an earlier return if it is in the welfare of the family. According to the ruling of the Court of Appeal in Szczecin of 5 December 2012 (file reference number I ACa 589/12), “The welfare of the family referred to in Art. 45 § 2 k.r.o. should be understood broadly and interpreted in accordance with the purpose of the provision. This aim is to lead to a comprehensive settlement of property issues between former spouses in one proceeding. ”. B. Kubica also points out that "The literature correctly emphasizes that when assessing the condition of the good of the family, the court should examine the situation of a specific family, and therefore it is not possible to define general criteria that allow for earlier settlements. In practice, an example of the possibility of applying Art. 45 § 2 k.r.o. there is a situation in which, after making the appropriate expenses or expenditures, the marital life has broken down "(B. Kubica [in:] Family and Guardianship Code. Commentary, ed. M. Fras, M. Habdas, Warsaw 2021, art. 45.). It is also worth emphasizing that it is not allowed to make earlier settlements by means of an appropriate agreement between the spouses, which results from the special nature of this provision and the exclusive right of the court to assess the condition of "good of the family".

As S. Madaj writes (Madaj, Proceedings nieprocesowe ..., p. 128), taking into account the above, we can conclude, a contrario, that there is no possibility of a later return, that is, one that would take place after the division of the joint property. This position is shared by the jurisprudence - in its decision of February 2, 2005, IV CK 454/04, the Supreme Court stated that "after a legally valid decision on the division of joint property has been passed, it is no longer possible to pursue claims for the return of expenditure from separate property to joint property and joint property into separate property ".

The issue of early return remains the subject of a dispute in the doctrine. According to the view of A. Szpunar, "this return is possible only during the time from the termination of the joint property until the joint property is divided" (A. Szpunar, On the damage caused by one of the spouses in the joint property, Law Asekuracyjne 1998, No. 2, pp. 17 ff.). The second position points out that "in Art. 45 § 2 k.r.o. a general clause for the good of the family was placed, and therefore the way to an even earlier return order should not be definitively closed, and in special cases, it is necessary to opt for the possibility of a court ordering the return also during the joint life "(see T. Sokołowski, Damage caused by the spouse in the joint property, The Asekuracyjne Law 1998, No. 3, pp. 45 et seq.). The correctness of this interpretation is indicated by the fact that the abolition of community may be contrary to the good of the family, if only one of the spouses works professionally and the other is involved in raising children and running the house. In such a case, the return to the joint property may have a positive impact on the situation of the family, at the same time it does not exclude the benefits of the community of property regime. It is important that the order for reimbursement of outlays or expenses from personal property takes place without undue delay, as it may happen that the property is subject to an unforeseeable reduction.

The demand for an earlier reimbursement of expenditure and expenses is recognized only in the procedural mode. This is due to the fact that there is no provision in the Code of Civil Procedure that would indicate the possibility of considering this type of cases in a non-litigious procedure. Pursuant to the decision of the Supreme Court of April 12, 2000 (IV CKN 27/2000), the procedural procedure also applies when, after the termination of joint ownership, there is no joint property as the object of division.


II 2022

Sharing the joint property during the joint property period

As a rule, during the period of joint property, it is prohibited to divide the joint property. First, property separation must be introduced. According to Art. 35 cryo, during the statutory joint life, neither spouse may claim the division of the joint property. He may also not dispose of or undertake to dispose of the share which, in the event of the termination of the community, will be attributed to him in the common property or in individual items belonging to that property.

Therefore, the view expressed in the judgment of the Court of Appeal in Gdańsk of October 7, 2020 (V ACa 380/20) is correct that "the view that allows the conclusion of contracts without restrictions to transfer certain assets between spouses' property is unjustified. Such agreements, as intended to circumvent the law, i.e. the provisions of the Family and Guardianship Code regulating contractual property regimes, should be considered invalid (Art. 58 § 1 of the Civil Code). "


I 2022

Remuneration for the use of joint property

There may be conflicts between former spouses over the use of specific items of the joint property. In a decision of March 5, 2021 (IV CSKP 30/21), the Supreme Court confirmed that "a spouse deprived by the other spouse of the possibility to use the assets of the joint property may, in a case for its division after the end of joint property, claim for remuneration for the use of these assets by the other spouse in addition to the share he was entitled to, if he showed the will to use them during the joint property period (Art. 46 of the Penal Code in connection with Art. 1035 and Art. 206, 224 § 1 and Art. 225 of the Civil Code). In special circumstances, this remuneration may be reduced pursuant to Art. 5 of the Civil Code ". What is important, according to the court, it is necessary to show the willingness to use the specific assets of the property. If this is not done, the remuneration cannot be claimed post factum.


XII 2021

Division of things on the inheritance department

The Supreme Court recalled in its decision of May 6, 2021 (V CSKP 29/21) that the dissolution of joint ownership may take place through the division of a joint thing. "Acting on the" division of things ", - the provision of Art. 211 of the Civil Code it involves division in a physical sense, ie by creating two or more new things out of one existing so far. Thus, the division each time leads to the creation of a new legal good, which - in principle - after the abolition of joint ownership, is the subject of the exclusive right of one of the existing co-owners. Such a division should be made when it is not inconsistent with the provisions of the Act or with the socio-economic purpose of the thing, and does not result in a significant change of the thing or a significant reduction in its value. In such cases, the item may be granted, depending on the circumstances, to one of the co-owners with the obligation to repay the remaining ones, or sold pursuant to the provisions of the Code of Civil Procedure. (Article 212 § 2 of the Civil Code). "

If there is a division of things in the course of the inheritance case, it is permissible to issue a partial decision (Art.317 § 1 of the Code of Civil Procedure) by "assigning a given object or right to one of the heirs (cf. also Art. 1044 of the Civil Code) with the obligation to repay the remaining ones (Art. 212 in conjunction with Article 1035 of the Civil Code), when it decides as a whole as to the component covered by the division of the estate, settling it comprehensively between all heirs, as well as the division of joint property, in the scope covering some assets, provided that such a provision must contain complete resolution of the issue of awarding this component to one of the participants and final settlement on this account. "


XI 2021

Claim for the transfer of ownership of a building in a case for the division of joint property

In a decision of 27 May 2021 (I CSKP 120/21), the Supreme Court stated that "in a case for the division of joint property, it is permissible to apply Art. 231 § 1 of the Civil Code " Article 231 § 1 of the Civil Code states that "an independent owner of land in good faith, who erected a building or other device on or below the ground with a value significantly transferring the value of the plot used for this purpose, may demand that the owner transfer to him the plots of land for adequate remuneration ".

Does this mean that, for example, when the spouses erected a building on a plot belonging to the personal property of one spouse, can the other spouse demand that he be granted ownership of the property belonging to the personal property of the first spouse? For now, we are waiting for the justification of the Supreme Court's decision. However, if this were the court's reasoning, it means that cases for the division of joint property could, in special cases, also apply to the spouses' personal property.


X 2021

Agreements between spouses

The Court of Appeal in Warsaw, in its judgment of 15 July 2021 (V ACa 651/19), tried to set limits on the admissibility of contracts between spouses in property matters. According to the court, "during the period of statutory matrimonial property law, it is permissible for the spouse to dispose of the subject belonging to the joint property on behalf of the other spouse's separate property. This is because the property community should serve, first of all, the spouses themselves, and disposing of the property components that belong to this community should constitute their exclusive right ”.

Nevertheless, the Court introduced certain limitations: "the freedom of the spouses in this respect is limited by the provision of Art. 35 k.r.o. Contradictory to this provision, and consequently invalid (Art. 58 § 1 of the Civil Code), will be such legal acts between spouses relating to joint assets, the content and purpose of which indicate that they are aimed at dividing the joint property during the statutory joint life. "

Of course, the court is right that the provisions prohibiting the division of joint property during the statutory joint life cannot be circumvented, e.g. through purchase and sale agreements or donation agreements covering the entire property. What, however, if the contract does not apply to the entire property, but only one component of the joint property. What if this asset has a significant value of the joint property. How is the admissibility of such an agreement to be determined by a notary (as such a question will most often refer to real estate)? These questions remain unanswered. In practice, therefore, it will be safer to introduce a state of property separation "for a while", sign an agreement with the spouse on the selected asset, and then re-introduce the state of joint property.


IX 2021

Items of property that bring income

In family law, we deal with the concept of "income-generating property". In the chapter of the family and guardianship code concerning the statutory property regime of spouses there is a provision stipulating that each spouse should reimburse expenses and expenditures made from joint property to his personal property, with the exception of expenses and expenditures necessary for income-generating property (Art. 45 § 1 KRO). Therefore, the question arises as to what can be regarded as an income-generating object and whether such an object can be a non-separated part of the property, e.g. a room.

According to the position of the Supreme Court contained in the decision of May 9, 2013, file ref. II CSK 593/12, the non-separated part of the property may be classified as an income-generating item, if the spouse used this part of the property to perform a freelance profession. Thus, if such a part of the property is, for example, renovated with money from the joint property of the spouses, then the spouse who, thanks to this part of the property, obtained income from performing a freelance profession in it, is not obliged to reimburse expenses and expenses incurred from the joint property. on this part of the property.


VIII 2021

Reimbursement of expenses and expenditures on separate assets before entering into marriage

Pursuant to the resolution of the Civil Chamber of the Supreme Court of March 5, 2003 (file ref III CZP 99/02) it is permissible for one spouse to submit a transfer for his / her benefit during the period of statutory commonality - pursuant to Art. 231 § 1 of the Civil Code - share in the ownership of land, which is separate property of the other spouse, built up with a residential building before entering into marriage, as a result of expenses made by both spouses during cohabitation. Such a view was expressed by the Supreme Court in connection with the legal issue presented to him by the District Court in Krosno. The subject of the case pending before the District Court was a situation in which the spouses, while still cohabiting before entering into a formal relationship, started building a common house, as a result of which the house became the property of only one of the spouses (in the described facts - the husband).

The Supreme Court decided that Art. 45 k.r.o. In the described facts, there were indeed three separate assets between the spouses, i.e. joint property and two separate assets. However, the joint property was irrelevant in the discussed case, since the claims between the later spouses arose even before the marriage was entered into. In such a state of affairs, only the claims of separate estates of the wife and husband were relevant to the case. Thus, the basis for settling the spouses' claims was Art. 231 of the Civil Code, which deals with the purchase of a building erected on someone else's land, and the norm of Art. 45 k.r.o. it did not apply at all.

It is worth noting that the Supreme Court presented one more argument in favor of such a resolution of the disputed issue - it was the protection of the housing interest of the spouse, who, being a co-investor of the house built on the land of his spouse, often economically weaker, may live in it only on the basis of a family title that fades with the cessation of married couples (in the discussed situation, the economically weaker party was the wife). The Supreme Court noted that: The possibility of earlier, even before the termination of joint property, the claim strengthens its legal protection, in particular in the event of a conflict between the spouses, which threatens to lose the co-ownership of the property by that spouse, which would lead to the expiry of the retention under Art. 231 § 1 of the Civil Code.


VII 2021

Taxation of a payable agreement for the division of joint property between the ex-spouse and the heirs of the other spouse

Director of the National Tax Information in the individual ruling of May 24, 2021; 0111-KDIB2-3.4014.16.2021.5. ASZ focused on the problem of a paid agreement for the division of property. In the reality of the present case, the spouses divorced and intended to divide the property before a notary. Unfortunately, before the split took place, one of the spouses died and his inheritance (which included a share of w in the property) was purchased by his two sons. The surviving spouse and heirs decided to conclude a notarized agreement on the division of joint property covering the property that was in the joint property acquired during the marriage, in which the matrimonial property regime was in force.

The authority emphasized that the agreements strictly defined in the act are subject to taxation with tax on civil law transactions. These include the agreement on the division of the estate and the agreement on the dissolution of joint ownership - in the part concerning repayments or subsidies. Such contracts have the same effects as the contract that the spouse and heirs planned to conclude. Due to this, the question arose whether a paid contract (with additional payments and repayments) for the division of joint property between the ex-spouse and the heirs of the other spouse is also subject to taxation.

In the discussed interpretation, the authority stated that the tax was not due. The contract in question is neither an agreement for the dissolution of joint ownership, as it concerns joint property of marriage and its legal effects are different, nor an agreement for the division of inheritance, as it is not concluded between the heirs. The admissibility of such an agreement is confirmed by Art. 46 and 501 of the Family and Guardianship Code.


VI 2021

The concept of "circumstances" in Art. 212 § 1 of the Civil Code

Art. 212 of the Civil Code regulates the methods of judicial dissolution of joint ownership. One of them is, mentioned in § 2, the granting of the thing that cannot be shared with one of the co-owners according to the circumstances, with the obligation to repay the others. The item may also be sold in accordance with the provisions of the Code of Civil Procedure.

It should be noted that the court may, within the limits of Art. 212 of the Civil Code, independently decide on the method of dissolution of joint ownership, based on a specific factual state of affairs (Decision of the Supreme Court of 23 July 1982, file reference number III CRN 181/82, Legalis). However, you cannot award the thing to any of the co-owners against his will, because such actions would be pointless, because it is the owner of the thing who knows best whether he needs the thing (Supreme Court decision of November 4, 1998, file ref.no. II CKN 347 / 98, Legalis). It seems, however, that the court is bound by the joint will of the co-owners as to the method of abolition of co-ownership, as well as the possible indication of the co-owner to be received, provided that such action is consistent with the law and principles of social coexistence (Order of the Supreme Court of 8 June 2017 r., file reference number V CSK 570/16, Legalis). However, this position has not always been shared by jurisprudence.

The priority should be to first try to assign the property to one of the co-owners. Only when this turns out to be impossible is it advisable to sell things. The choice of a specific joint owner depends on the circumstances mentioned in the provision. This concept should be understood as meaning many factors, among which the following can be distinguished: the type and purpose of things, the family status of the co-owners, professional background and type of professional activity, property status and the possibility of repayment of other co-owners (K. Górska, Commentary to Art. 212 of the Civil Code [in:] E. Gniewek (ed.) Civil Code. Commentary, 9th edition, CH BECK 2019).


V 2021

Services provided to the company and the division of joint property

Article 45 of the Family and Guardianship Code regulates the rules of settlements by spouses for expenses and expenditures made during the period of the statutory community property from common property to personal property of each of them and from personal property to joint property.

This provision stipulates that each spouse should reimburse the expenses and outlays made from the joint property on his personal property, with the exception of expenses and expenses necessary for income-producing property. In addition, you can request reimbursement of expenses and expenses that one of the spouses made from his personal property into the joint property. However, it is stipulated that you cannot demand reimbursement of expenses and outlays used to meet the needs of the family, unless they have increased the value of the property at the time of the cessation of community.

The provisions of the Family and Guardianship Code do not define the concept of expenses and outlays made from one property to another. Due to this, there may be doubts as to what may be considered an expense or outlay within the meaning of Art. 45 of the Family and Guardianship Code.

The jurisprudence has decided whether, due to the specific nature of the provision of services to the company, in the event of the division of joint property after the termination of statutory commonality between the spouses, it may be classified as an outlay or expenditure within the meaning of the Family and Guardianship Code. So far, the Supreme Court has supported such a position.

In the decision of January 16, 2013, reference number II CSK 193/12, the Supreme Court stated, however, that the service provided by the other spouse - a partner in a civil partnership - to the company cannot be considered an expense or outlay. This means that the spouse may not claim the reimbursement of the value of services provided by the other spouse to the civil law partnership pursuant to Art. 45 of the Family and Guardianship Code.


IV 2021

No settlement of all items in the division of property

In division proceedings, the court hearing the case is required to ex officio determine the composition of the joint property and then divide it. Moreover, the court settles all disputes of the co-owners over the ownership right, as well as mutual claims of the co-owners for possession of the property. All claims of this type should be reported already in the course of the departmental proceedings, because after the maturity of the decision, the parties cannot pursue them. The above rules result directly from the provisions on the division of the estate (Article 684 of the Code of Civil Procedure) and the division of joint ownership (Article 618 of the Code of Civil Procedure), which apply accordingly to other division proceedings.

In the decision on the division of inheritance or marital property, the Court should therefore rule separately on each item about which there is a dispute or was included in the joint property (or inheritance property). In practice, a question may arise what to do if the court omits some of the disputed items in the judgment and fails to divide them. In such a case, does the failure to divide the object mean that the object is not included in the joint property (and therefore cannot be divided), or does the court mistakenly omit the issue? The issue is important because in the first case an appeal should be made against the decision, and in the second - an application for supplementation of the decision.

The above-mentioned issues were raised by the Supreme Court in the resolution of September 17, 1969, III CZP 70/69, stating that in the described case the party should challenge the judgment with an appeal. The Supreme Court emphasized that in the proceeding for the division of property, the court examines all relations related to this division and that the decision on the division of joint property covers the entirety of the case. Due to this, the fact that an asset was not included in the decision is a substantially negative decision, corresponding to the fact that this asset was not included in the assets subject to division. The dissatisfied party may challenge the judgment, accusing the wrongful determination of the composition of the joint property, reconciling the entire judgment in its entirety, because correct determination of the composition and value of the joint property also determines the correctness of the remaining dispositions of the judgment.


III 2021

Claim for reimbursement of expenditures to the common benefit after the sale of shares

In the resolution of the Supreme Court of February 21, 2008, ref. No. III CZP 144/07, the Supreme Court considered whether the liability for satisfying the claims of the co-owner who made the expenditure for the joint is borne by persons who are co-owners of things at the time of ruling on liability in this respect, or by persons who are co-owners at the time when the expenditure is has been made.

Benefits and other revenues from the common thing fall to the co-owners in relation to the size of the shares. In the same proportion, joint owners bear the expenses and burdens related to the joint property. Article 207 of the Civil Code, which specifies the rules of participation in the expenses and revenues contributed to the joint property by co-owners, does not clearly define whether it concerns co-owners at the time of the decision or at the time of making the expenditure. For this reason, it was necessary to dispel interpretation doubts by the Supreme Court.

The Supreme Court pointed out that the claim for the reimbursement of the value of the expenditure incurred by one of the co-owners for the benefit of the joint venture is due against persons who were co-owners at the time the expenditure was made. In the opinion of the court, the provisions of the code indicate that the claim for reimbursement of the appropriate part of the expenses is a relative claim, i.e. arising and implemented in relations between the co-owner who incurred the expenses and the entity that, at the time of incurring them, was obliged to pay the appropriate part of the expenses.

The Supreme Court also considered whether it may be significant that the current co-owner of the property, obliged to return the value of the expenditure, acquired a share in the joint ownership on the basis of a free-of-charge agreement. In the case at hand, the co-owners sold their shares in the form of a donation. In the opinion of the Supreme Court, the free acquisition of a share in joint ownership will not matter. With art. 207 of the Civil Code, it does not follow that the legislator links the modification of the rules of settlements between co-owners with the gratuitous nature of the acquisition of a share.

It should be noted that the previous jurisprudence of the courts was different. However, since 2008, the courts have uniformly ruled that the claim for reimbursement of the value of expenditure incurred by one of the co-owners for the benefit of the joint venture against persons who were co-owners at the time the expenditure was made, also when these persons sold their shares free of charge.


II 2021

Appeal and the court's failure to include the decision in the final judgment

If the court did not include a negative decision in the substantive decision concluding the proceedings, e.g. dismissing the application for settlement of outlays, the party should submit an application for supplementing the decision. In such a situation, an appeal would be directed against a non-existent judgment. This view was expressed by the Supreme Court in its decision of 20 December 2019, file ref. IV CZ 103/19.

In the case in question, the District Court ruled on the outlays made on the joint property, deciding to grant the application of a participant in the proceedings in part. The court, however, did not dismiss the application for the remainder of the expenditure, which it should have done. The participant appealed to the District Court, which indicated that the appeal was inadmissible in this situation. The court justified its inadmissibility in this respect with the lack of a decision in the District Court's decision on partial dismissal of the application regarding the settlement of outlays.

The Supreme Court drew attention to the problem of the admissibility of an appeal with an appeal that did not exist in the decision on the division of the joint property of the former spouses.

According to Art. 684 of the Code of Civil Procedure, which is relevant in the case of the division of joint property, the composition and value of the divided estate is determined by the court. Therefore, the court is obliged to determine the composition and value of the joint property to be divided. In practice, this means that it is the court that is obliged to determine the value of the outlays made of this property on personal property.

The Court's failure to resolve, even partially, in the operative part of the decision will be subject to verification by submitting an application to supplement the decision, and not by lodging an appeal.


I 2021

Determining the market value of a mortgage-encumbered property in proceedings for the division of property

If it is necessary to divide the joint property of the spouses (e.g. due to divorce), the issue of determining the value of the property acquired by the spouses on which they jointly established a mortgage may arise. This problem has often been considered by the Supreme Court. In the decision of March 13, 2020, file no. III CZP 64/19 of the Supreme Court ruled that in cases relating to the division of marital property, the value of the mortgage, as a rule, does not affect the value of the common property allocated to one of the spouses as a result of the division.

The court ruled that when selling the real estate, the price determines its market value, and the mortgage burden only affects the manner of disposing of the price by paying the debt in order to terminate the mortgage.

The mortgage is an accessory, as it secures the debt and may exist separately from the personal obligation to satisfy the debt also from other assets apart from the encumbered real estate. The sale of the mortgaged property is therefore irrelevant to personal liability for the debt.

Thus, the Supreme Court confirmed the earlier interpretation concerning the determination of the value of the real estate encumbered with the mortgage. According to it, the mortgage on the real estate of the former spouses does not affect the market value of the real estate, taken by the court as the basis for determining the amount of repayment or additional payment due to the spouse who does not receive real estate or the right to the premises. According to the court, the division of joint property does not affect the maintenance of the joint and personal obligation of both spouses to repay the loan, even after the division of the joint property.

The Supreme Court also recalled what circumstances are of legal importance in determining the value of real estate. He pointed out that when determining the market value of the real estate, the real estate appraiser takes into account, in particular, the purpose of the appraisal, type and location of the real estate, intended use in the local plan, the degree of technical infrastructure equipment, the state of its development and available data on prices, income and features of similar real estate.

At the same time, the court recalled that it is possible to pursue a claim between spouses for the return of the amount of a liability secured by a mortgage, paid by one of them after the decision on the division of the joint property becomes final.


XII 2020

Usually, the bank will not participate in the case for the division of joint property

In the legal literature and judicature, one of the formal and legal prerequisites for the admissibility of an appeal is the existence of a legal interest in appealing against a judgment. If it is not shown, the appeal shall be rejected, unless its recognition is justified on the grounds of public interest.

It is assumed that the condition for granting judicial protection is the existence of an objective need for it to be obtained by the entity asserting its rights, which is defined as a legal interest. Initiating civil proceedings and undertaking procedural actions by private entities should be confronted with whether there is an objective need to initiate proceedings in a specific case.

However, the Code of Civil Procedure stipulates that the interested party may participate in any state of the case until the end of the proceedings in the second instance. According to Art. 510 § 1 of the Code of Civil Procedure, anyone whose rights are affected by the outcome of the case is interested, and if they take part in the case, they become its participant. In the judicature, the concept of an interested person is defined broadly. It is assumed that the legal interest within the meaning of this provision may be both direct and indirect. In the decision of September 25, 2019, file no. III CZ 32/19 The Supreme Court stated that the broad understanding of a legal interest as a premise justifying the assignment of the status of an interested party to a specific person does not exempt the court from the obligation to assess in the facts of a given case who is and who should be a participant in the proceedings. In this way, the Supreme Court places an obligation on the courts to assess the question of being concerned in the context of each specific case.

In the same case, the Supreme Court stated that the bank, as a mortgage creditor, has no legal interest in participating in a case for the division of joint property, if the division of the mortgage-encumbered property takes place by granting it to one of the spouses or if the property is physically divided.

KS


XI 2020

Marital joint ownership and shares in a limited liability company

It may happen that the contribution made to the limited liability company belongs to the property of the joint partner and his spouse. In the resolution of July 7, 2016 (reference number III CZP 32/16), the Supreme Court answered the question whether the share in the company acquired by the partner is then part of the joint property of the spouses.

In the above-mentioned judgment, the Supreme Court decided that if the contribution (e.g. cash) to the limited liability company belonged to the property of the joint partner and his spouse, also the share in the company taken up by the partner will be included in this property. Thus, the Supreme Court supported the concept of belonging of shares to the property of spouses, which is the dominant in the doctrine and jurisprudence.

Any doubts concerning the belonging of a given item should be resolved in favor of the joint property. It is presumed that the property acquired by one of the spouses during the marital joint property is part of the joint property of the husband and wife. It should be noted that this presumption can be rebutted by proving that the acquisition was made with funds constituting the personal property of one of the spouses.

On the other hand, even though the funds for taking up shares in a limited liability company in such a situation they come from joint property, but the acquisition is made only by one of the spouses. Therefore, only the spouse who participated in the transaction related to the acquisition becomes a partner of the partnership.

Thus, the Supreme Court separated corporate rights from property rights. Corporate rights (e.g. voting rights at the shareholders' meeting) are part of the personal property of the partner spouse because he took up the shares. On the other hand, property rights related to shares (eg the right to dividend) will become part of the joint property of the spouses.

It is also worth paying attention to the judgment issued by the Supreme Court on April 4, 2019 in the case with reference number III CSK 146/17. It was resolved that the sale of shares in the company (e.g. through a donation) is invalid if the other spouse did not know about it. Thus, the Supreme Court opted for the protection of the spouse's interests and confirmed the position of the doctrine that the agreement for the sale of shares in a limited liability company concluded without the consent of the other spouse is invalid. According to the Supreme Court's ruling, actions aimed at disposing of shares or transferring economic activity to another person without the consent and knowledge of the spouse have no legal justification. At the same time, the Supreme Court noted that despite the fact that Art. 17 of the Act on the National Court Register establishes the presumption that the data entered in the National Court Register are true, it does not ensure protection of the buyer of shares against unauthorized persons. This provision only establishes a rebuttable presumption which may be rebutted.

KS


X 2020

Important reasons for establishing property separation

According to Art. 52 § 1 of the Family and Guardianship Code, for important reasons, each spouse may request the court to establish separation of property. However, this provision does not specify specific situations and reasons that could be considered important by the court.

In the judgment of January 31, 2003, file ref. IV CKN 1710/00 The Supreme Court emphasized the role of the matrimonial property regime. Its purpose is to strengthen the family and to provide it with a stable material base, and it fully implements the principle of equal rights of both spouses in the field of property relations, constituting the material basis for the functioning of the family. By important reasons giving rise to the abolition of this unity, the court understands the emergence of such a situation, which in specific factual circumstances causes a state that entails a violation or a serious threat to the property interests of one of the spouses and, as a rule, also the good of the family.

The Supreme Court has repeatedly made statements as examples of the existence of these important reasons.

• separation

In the judgment of November 24, 2017, file ref. I CSK 118/17 as one of such reasons, the Supreme Court recognized the separation between the spouses. The court stated that a long-term de facto separation may justify the establishment of property separation by the court, if this state of affairs prevents cooperation in the management of the joint property, entails a violation or a serious threat to the property interests of one of the spouses, or results in a permanent break of any property relations and the inability to take up joint economic decisions.

• Breaking off property relations

However, in the judgment of January 14, 2005, ref. No. III CK 112/04, the Supreme Court stated that the condition for the application of Art. 52 § 1 of the Family and Guardianship Code may result in a permanent severance of all property relations and the inability to make joint economic decisions.

• Criminal proceedings

In the judgment of 15 October 1998 (I CKN 854/97), the Supreme Court ruled that the initiation of criminal proceedings against one of the spouses may constitute a valid reason to abolish the statutory community.

• Wasting money

In the judgment of February 10, 1997 (file no. I CKN 70/96), the Supreme Court recognized the creation by one of the spouses of a situation in which the continuation of the joint property threatens the interests of the other spouse and the good of the family as an important reason justifying the abolition of joint property between spouses. , which may take place especially when one of the spouses squanders their joint property or is completely mismanaged.

• Reckless incurring debts

It is assumed that the recognition as "valid reason" within the meaning of Art. 52 § 1 of the Family and Guardianship Code, incl. the reckless incurring of debts by one of the spouses which undermine the basis of the family's livelihood. At the same time, the court noted that in such a situation, the determination by the court requires both an element of recklessness and a threat to the existence of the family (II CRN 95/93 - Supreme Court judgment, judgment of 17 September 1993).

It should be remembered that it is always up to the court hearing the case to decide whether the given claimants are valid. There is no doubt, however, that the jurisprudence of the Supreme Court has a large impact on the decisions of other courts.

KS


IX 2020

Division of property and rights in the company

The moment the marriage is concluded between the spouses, joint property (statutory) arises. In accordance with the provisions of the Family and Guardianship Code, this community includes property acquired during its lifetime by both spouses or by one of them.

What happens when there are shares in the company in the joint property? They will then be treated differently in terms of property relations between the spouses and differently in the relationship between the company and its partners.

In the decision of 31.01.2013, II CSK 349/12, the Supreme Court indicated that the shares in a limited liability company acquired by one of the spouses for funds from the joint property are included in this property. Such a position is accepted in the literature and jurisprudence. However, it is stipulated that the result of the inconsistency between commercial law and family law is the difficulty of reconciling the status of a partner resulting from the partnership agreement, which is only enjoyed by the spouse acquiring shares, with the joint nature of the marital property to which the acquired shares belong.

In the above decision, the Supreme Court indicated that the shares in a limited liability company belonging to the joint property may, in principle, be divided between the former spouses, and thus also accrue to the co-owner who was not a partner. The only obstacle to such a division would be the inclusion in the articles of association, as provided for in the Commercial Companies Code, of a reservation limiting or excluding joining the partnership of a spouse in the event that the shares are jointly owned.

In the case at hand, the disputed shares were disposed of after the end of the statutory commonality between the parties. According to the court, the effectiveness of this type of regulation should be the subject of an assessment carried out in proceedings for the division of property. The consequence of establishing the ineffectiveness of the regulation is that the property is divided as if the disposal had not taken place. It should be noted, however, that in relation to third parties, the allocation of an asset that has been sold in the decision to divide it up, only gives the spouse the right to take action against the buyer to whom the asset has been allocated. It does not, however, constitute a binding title for the acquirer, determining the right of the spouse indicated therein to the sold asset.

To sum up, the interpretation of the Supreme Court means that in the event that the marital cohabitation ceases or is abolished, part of the shares may go to the spouse who previously did not have the formal status of a partner. This will be the case, for example, in the event of divorce. This means that the former spouse may then become a partner in the partnership.

In order to avoid such problems in practice, it is possible to regulate matrimonial matters in the articles of association. According to Art. 1831 of the Commercial Companies Code, this agreement may limit or exclude a spouse's joining the partnership if the share or shares are jointly owned.


VIII 2020

Combining the division of inheritance and division of joint property in one proceeding

Proceedings for the division of joint property and for the division of inheritance are, as a rule, two separate proceedings. They can only be connected as a result of a partial personal identity (e.g. as a result of legal succession after the deceased ex-spouse) and objective identity. This was the opinion of the Supreme Court in its decision of January 13, 2016, V CSK 254/15.

The division of the estate and the division of joint property may be combined in one proceeding, if the entire estate or individual items included in it constitute joint ownership for reasons other than inheritance. The provisions on the abolition of joint ownership (Civil Procedure Code Art. 688, Civil Procedure Code Art. 567 § 3) apply accordingly.

Art. 689 of the Code of Civil Procedure allows the case for the division of inheritance to be combined in one proceeding with a case for the dissolution of joint ownership and a case for the division of joint property after the termination of the joint property of the spouses. If the inheritance includes the testator's share of the property covered by the statutory matrimonial commonality, the division of the joint property, combined in the same proceedings, is necessary to divide the inheritance.

It will be different in a situation where a final judgment has already been passed, deciding on the demand to establish unequal shares of the spouses in the joint property and on claims for reimbursement of expenses, expenditure and other benefits from the joint property for separate property, or vice versa, or the partial division of the inheritance does not apply to the testator's share in the property common.

The composition and value of the division and the joint property to be divided shall be determined by the court. Composition and condition are determined according to the moment of its opening, and value according to prices at the time of the division.

At the same time, the Supreme Court states that there is no independent normative basis for the merger of cases concerning the division of inheritance and division of joint property with a case for division of the property of a civil partnership.


VII 2020

Leasing and divorce - who owns the car leased before and bought out after the divorce?

According to art. 31 of the Family and Guardianship Code, upon entering into marriage, a property community is created between the spouses pursuant to the Act, covering property items acquired during its duration by both spouses or by one of them. For assets acquired during the marriage to be included in the personal property, one of the conditions contained in art. 33 KRiO. As indicated in the judgment of the Supreme Court of 28 January 2015, reference number II CSK 322/14 "expenditures from joint assets on the personal assets of a spouse must, at the time of their making, increase (purchase of new components, improvement of existing ones) or maintenance personal property of the spouse. "

The subject of the above the ruling was the issue of how to calculate the costs and benefits of a lease agreement with the option to purchase the subject of this agreement, if the contract was concluded by one of the spouses during the validity of the matrimonial property community, paid mainly for the joint property.

The division of joint property takes into account its value as at the date of division, but according to the status quo at the moment of termination of joint property. In the said judgment, at the time of termination of the joint property, the joint property included the right to use the property under the lease agreement and a claim for its purchase. After the cessation of jointness, the claim for purchase was transformed into ownership. Despite the fact that this took place after the cessation of jointness, the resulting property right should also be treated as joint (entering joint property). The court stated in the justification that subsequent transformation of the claim did not change the common nature of the property rights of the parties.

To sum up, both the rights and obligations under the leasing contract and the purchased vehicle, even after the termination of the property community, are jointly owned by the spouses.


VI 2020

Division of property assets and the moment of acquisition of real estate within the meaning of the Income Tax Act.

In accordance with art. 10 paragraph 1 point 8 of the Personal Income Tax Act, the sale of real estate after 5 tax years on the purchase / construction of real estate is not a source of income, and therefore is not subject to income tax. This rule is relatively simple. Interpretation problems arise, however, when the spouses acquired the property jointly, and after divorce, as a result of the division of property, it was granted to one of them. In this case, can you sell without tax after 5 years of acquisition with your spouse or from "acquisition to personal property" - after the division of property.

The above doubts were dispelled by the Director of the National Treasury Information by issuing an individual tax decision of August 6, 2019 No. 0115-KDIT2-1.4011.224.2019.1.DW. It was stated there that the date of purchase referred to in art. 10 paragraph 1 point 8 of the Personal Income Tax Act is the acquisition of joint property of the spouses.

The authority referred to art. 10 paragraph 6 of the Personal Income Tax Act, stating that in the event of a paid sale after termination of matrimonial property joint property, which was acquired or built during this community, the period of 5 years is counted from the end of the calendar year in which the property was acquired to joint property of the spouses or their construction during the marriage joint property.

It should be remembered that the above rules apply only in the case of the sale of real estate which was not carried out in the course of business activity. If we bought the property only for profit (and did not serve us for the purposes of new housing) or if we make many transactions of this type in a relatively short time, the Tax Office may consider that we conduct business in this area. In this case, the "five year rule" will not apply and we will be subject to income tax.


V 2020

Liability for debts incurred before marriage

In accordance with art. 31 § 1 of the Code, upon entering into marriage, a property community arises between the spouses pursuant to the Act. It covers property acquired during its duration by both spouses or by one of them. Such items fall into the so-called joint property. Property items not covered by statutory community belong to the personal property of each of the spouses. One of the items belonging to the personal property of the spouses are claims arising from marriage during work or due to other gainful activities of one of the spouses.

In the light of art. 29 § 1 of the Act of August 29, 1997, the Tax Code, in the case of married persons, liability covers the separate property of the taxpayer and the joint property of the taxpayer and his spouse.

In this case, the question arises whether the spouse will be liable for the tax obligations of the other spouse arising after marriage, if the arrears arose a few years before entering into marriage?

The answer to this question was provided by the Director of the National Treasury Information in tax interpretation number 0111-KDIB3-1.4017.11.2019.1.KO. A taxpayer who got married without tax separation, a few months later bought a flat with his wife for joint property. A few years ago, the Applicant's wife was a member of the management board of a limited liability company. In connection with this circumstance, two tax proceedings were instituted against her regarding the declaration of her joint and several liability for tax arrears prior to the marriage.

The applicant will not be responsible for the tax liabilities of his wife with his own personal property and joint property that arose as a result of his wife's joint liability for tax arrears of a limited liability company if the arrears arose before marriage. This means that the property and rights belonging to the joint marital property of the Applicant and his wife will not be able to be enforced to satisfy or secure tax obligations chargeable to his wife for joint and several liability for tax arrears of a limited liability company.

Thus, the director of the KIS stated that if the arrears arose before marriage, the taxpayer would not be responsible for the obligations of his wife with joint or personal property. He doesn't have to worry about losing his flat.


IV 2020

Consumer bankruptcy and the joint property of spouses

If the debtor goes bankrupt, his property enters the so-called bankruptcy estate, from which the creditors then satisfy themselves. However, if the debtor is married and there is a property relationship between the spouses, the question arises as to the joint property. Does he also go to bankruptcy estate or is he excluded from it?

The situation is clear when the spouse-debtor was in business. These issues are directly regulated by art. 124 of the Bankruptcy Law, which provides that on the day of declaration of bankruptcy, property separation arises, the joint property of the spouses enters the estate and its division is inadmissible. In such a situation, the spouse of the bankrupt may only assert claims for participation in the joint property by reporting this claim to the judge-commissioner. This means that the creditor's interest is given priority over the interest of the spouse.

In the doctrine and case-law, the issue of joint property in consumer bankruptcy was contentious, in which the above-mentioned art. 124 of the Bankruptcy Act shall apply only accordingly. Ultimately, this issue was decided by the Supreme Court by a resolution of 16 December 2019 (file reference number III CZP 7/19), in which it stated that general rules apply to consumer bankruptcy, i.e.

  • property separation arises between spouses,
  • all joint assets are included in the bankruptcy estate and
  • the division of joint property is not allowed.

The spouse may submit his claims to the part of his property due to the judge-commissioner.


II 2020

Division of shares in a company with limited liability, in which the spouse is not a partner

When dividing the property that was covered by statutory community, the Court may grant the shares of a limited liability company belonging to that property to a former non-partner only with his consent. The above conclusions were reached by the Supreme Court in a decision of 16 March 2018 (file reference number IV CSK 105/17).

The above statement concerns the situation in which shares in a limited liability company were acquired for funds belonging to the joint property of the spouses, but only one of them became a partner in that company. This state of affairs is of course possible, because, as the Court stated, the property sphere should be clearly distinguished from the corporate sphere.

The court also noted that a spouse who was not yet a partner in the Company may become one on the basis of a court decision issued in a case concerning the division of joint property of spouses after the termination of statutory jointness. However, you cannot make someone a partner without his consent. This is due to the fact that the principle of voluntary participation applies to all corporations (associations of persons) - and the corporation, despite clear capital elements, is also a limited liability company

The above argument was supported by rich case law of the Supreme Court, min. by the resolution of the Supreme Court of July 7, 2016, III CZP 32/16, by decision of November 23, 2000, I CKN 950/98, or by judgments: of May 20, 1999, I CKN 1146/97; of October 5, 2005, IV CK 99/05; of January 21, 2009, II CSK 446/08.

In the presented situation, instead of shares, the court will grant repayment to the spouse who is not a partner (and therefore the monetary equivalent of the part of the shares due to him in the Company). Of course, provided that the spouse does not agree to "enter" the Company.>


I 2020

Central Information on bank accounts

Often the problem of heirs when making a division of the estate is the lack of information about where the deceased had their bank accounts. In such a situation, Central Bank information about bank accounts can be of help (it has been operating since July 1, 2016). It is enough to submit an appropriate application to any bank or credit unions for information and you can obtain information from all banks and credit unions. The service is payable, as the bank charges a commission for providing answers. The amount of commission varies depending on the bank.


XII 2019

No limitation period for requesting unequal shares

In accordance with art. 43 of the Family and Guardianship Code, both spouses have equal shares in the joint property. However, as parish says 2 of this article, for important reasons, each of them may request a fixing of shares, taking into account the extent to which the parties contributed to its creation. As the Supreme Court stated in its resolution reference number III CZP 83/72 of November 22, 1972, request under art. 43 of the Family and Guardianship Code is not of a financial nature, but it aims to shape a different legal relationship. Consequently, such a claim is not subject to a limitation period. The Supreme Court also supported these conclusions by the provisions of Art. 220 and 1035 of the Civil Code, from which it follows that the provisions on joint ownership apply to joint property, which expressly exclude the limitation period for claims ending it. However, according to art. 567 of the Code of Civil Procedure, settlement of unequal shares is part of the division of property, therefore the statute of limitations also does not apply. Consequently, the spouses may submit to the court an application for determination of unequal shares in joint property without a time limit, but only until the division of joint property.

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XI 2019

Relations between the personal property of spouses and joint property

The most common among the matrimonial property regimes is community property. Three properties operate simultaneously in this system: wife's personal property, husband's personal property and joint property. Distinguishing which items fall into which property can be problematic in some situations. It can be difficult to determine which of the properties entered an object that was bought partly with money from the personal property of one of the spouses and partly from joint property.

This issue has been raised many times in the past by the Supreme Court with various outcomes. Finally, on October 19, 2018, the Supreme Court issued a resolution composed of three judges (file reference number III CZP 45/18), in which he argued for the rightness of the theory according to which "an item acquired during marriage, in which statutory property community applies , in part from the proceeds of the personal property of one of the spouses, and partly from their joint property, enters the personal property of the spouse and the joint property of the spouses in shares corresponding to the ratio of funds allocated from those assets for its acquisition, unless a benefit from personal property or the joint property transferred for the acquisition of things was an expenditure on the joint or personal property, respectively. "

For example, you can imagine a marriage, Ania and Tomek, between which there is property commonality. Ania received PLN 300,000 in inheritance (inheritance and donations are in principle included in the spouse's personal property). The spouses collected together (from remuneration for work, which as a rule enters the joint property) PLN 200,000 and bought a flat for PLN 500,000. This flat will be 60% owned by Ania and 40% jointly by both. If Ania and Tomek divorce and there is an even division of property (which is the most typical situation), Ania will be the owner of 80% of the apartment, and Tomek 20% of the apartment.

It should be remembered that the resolutions of the Supreme Court are not binding on the courts, therefore different judgments may appear in individual cases. However, such situations are extremely rare because the Supreme Court enjoys high authority and its judgments and resolutions are considered valuable interpretative guidelines.



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X 2019

No division of property when convicted of abuse

The Supreme Court in a decision of June 7, 2019 (file reference number V CZ 30/19) stated that if one of the spouses was convicted of abuse of the family, he cannot demand a division of the property that would lead to the situation that it would become a neighbor of his ex-wife.

In the case described, the division of real estate was to divide the shared house into 2 apartments (one for wife and one for husband). A serious conflict of parties resulting from the fact that the participant was abused by his ex-wife and minor children, which was established in a criminal trial, is a circumstance that prevents the division of real estate despite the existence of technical possibilities. Although the division of the subject of joint ownership is by its nature the most appropriate way out of joint ownership, all circumstances must be considered, including the possible conflicting of the division with the socio-economic purpose of the property, as if premises are separated, the owners will need to cooperate in order to maintain common parts of the building . This necessitates careful consideration of whether co-owners will be able to work together. In the circumstances of the case, this is not a typical conflict of divorced spouses, but a conviction of a participant for mistreatment of the applicant and minor children and for punishable threats against the applicant's partner. The purpose of the division is to grant each owner a place to live in, because this is the socio-economic purpose of the property. The division assuming the sale of the premises by one of the co-owners because of a justified fear of the other co-owner denies such purpose.



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