What is the equalization of gains?

Upon marriage, spouses automatically live in the matrimonial property regime of community of gains. In this matrimonial property regime, there are no joint assets. So you do not own anything jointly with your spouse. You remain the sole owner of the property belonging to you before and during the marriage. If you acquire something jointly, such as a plot of land or an apartment, then you are both owners. You get a gain from it.

In the event of divorce, the increase in assets during the marriage, i.e. the accrued gain, is divided between the two spouses. This equalization is based on the fundamental idea that both spouses had an equal share in the values generated during the marriage. In German it is called “Zugewinnausgleich”.

In short, you remain the sole owner of your assets even after marriage. This applies to assets you owned before marriage as well as to assets you acquired during the marriage. However, if you get divorced, there will be an equalization of the increase in assets.

Community of joint gain: No liability for the debts of the other person

In the marital property regime of community of gains, you as a spouse are only liable for your own liabilities or debts. It does not matter whether the liabilities existed before the marriage or were only created in the course of the marriage. The only exceptions are if, for example, you separately agree on joint liability of the other spouse in the context of a bank loan.

In the case of divorce, the gain is equalized

At the time of divorce, the assets are usually equalized. However, since the estates remain separate, the equalization takes place only in the form of an equalization payment. Thus, they have no claim to transfer of ownership, for example, of real estate or valuables. However, the acquisition of valuables and real estate by one spouse during the marriage is taken into account in terms of value within the scope of the claim to equalization of gains.

Incidentally, this also applies in the event that the assets of one spouse have decreased during the marriage. Then no gain was generated. This has also not resulted in any increase in assets that would have to be compensated for in the divorce. There is no negative gain or negative assets.

The following example shows how the equalization of gains works:

The assets at the beginning of the marriage

Initial assets are the assets owned by the respective spouse at the beginning of the marriage.

In our example, the wife enters the marriage with €100,000 and the husband owns €300,000 at the time of the wedding. Initial assets include not only cash and bank deposits. Other assets, such as stocks, real estate, jewelry, antiques, paintings, vehicles, etc. are also included.

The assets at the end of the marriage

Final assets are the assets which the respective spouse has at the time of service of the divorce petition (§§ 1375 (1), 1384 BGB in conjunction with § 261 (1) ZPO). Here, too, all items that have an asset value count, including, for example, the sports car acquired during the marriage.

We assume that at the end of the marriage the wife has cash, bank deposits and tangible assets worth €600,000, and the husband has bank deposits, shares and a property worth €500,000 in total.

How to calculate the gain

If the initial assets are deducted from the final assets, this results in the gain in assets that was generated during the marriage.

In our example, the wife has achieved a gain of €500,000 and the husband €200,000.

The spouse liable for compensation

The spouse who has generated more gain is always used to equalize the gain. In the present example, the wife is subject to equalization because she has a higher gain (€500,000) than her husband (€300,000).

The claim to equalization of gains is not linked to the final assets or to who has “more” at the end of the marriage. Rather, it is a matter of compensating for the increase in value during the marriage period. The background to this is the statutory model, according to which both spouses have contributed their share to the increase in assets.

Since only the increase in value of the assets is compensated, it may also be that the wealthier spouse asserts a claim for equalization of gains: If, for example, the wife enters into the marriage with €1,000,000 and continues to have €1,000,000 as her final assets, while her husband enters into the marriage with €0 and has earned an amount of €500,000 at the end of the marriage, then the wife would have a claim for equalization of gains.

The calculation of the compensation claim

The equalization claim amounts to half of the amount by which the gain of one spouse exceeds the gain of the other spouse. The gain is calculated from the difference between the initial and final assets of a spouse. The spouse with the greater increase in value owes the other half of the increase.

If the wife had initial assets of €100,000 and final assets of €600,000, the gain is €500,000. The husband had initial assets of €300,000 and final assets of €500,000. The gain is therefore €200,000.

Due to the higher increase in value, the wife is liable to the husband for equalization of gains.

The husband is entitled to half of the difference between the two gain amounts as a compensation claim: If the husband’s €200,000 is deducted from the wife’s €500,000, €300,000 remains. The husband entitled to equalization is entitled to half of this amount, i.e. €150,000, as an equalization claim.

In the table you can see this example calculation.

The enforcement of the claim for equalization of gains

The spouse entitled to equalization must assert the equalization claim with concrete figures. Otherwise, the court will not equalize assets in the divorce.

The duty to provide information pursuant to § 1379 BGB

In order to find out whether a compensation claim exists at all, the spouses are obliged to provide information. Upon request, appropriate supporting documentation must also be provided.

Time of assertion

The claim for equalization of gains is usually asserted in the course of the divorce. The equalization claim itself arises with the final divorce. From this point on, the claim to equalization of gains is inheritable and transferable.

The claim to equalization of gains is subject to a limitation period of three years. Therefore, if you were legally divorced in June 2017, for example, you can still assert the compensation claim until December 31, 2020.

Early claim to equalization of gains according to § 1385 BGB

In exceptional cases, an early equalization of gains may be requested. This is possible, for example, if asset-reducing manipulations by one spouse are to be feared or one spouse no longer wants the other to share in an increase in assets.

However, the prerequisite for this is that the divorce is already planned but has not yet been applied for in court. The early equalization of gains only plays a role in the period prior to the service of the divorce petition on the other spouse.

If you are interested in an early equalization of gains, you should seek advice. To do this, it is best to contact a lawyer who specializes in family law.