Separation, Real Estate, and Assets

A separation puts not only a family’s personal life but often also its financial arrangements to the test. This becomes particularly challenging when real estate, joint loans, self-employment, business interests, or other assets are involved.

A common expectation is that, upon divorce, the family court will definitively resolve all outstanding financial issues. This is not the case. Under the statutory matrimonial property regime, each spouse’s assets generally remain their own; they do not automatically become joint property simply by virtue of marriage. In the event of a divorce, a potential equalization of accrued gains may need to be considered ( Section 1363 of the German Civil Code (BGB)).

Pension rights equalization is routinely addressed ex officio in divorce proceedings. Other ancillary matters, such as issues related to the matrimonial property regime, are, however, only included in the divorce proceedings under certain conditions and if they are properly brought before the court ( Section 137 of the Family Court Act (FamFG)). Real estate, ongoing loan payments, spousal support, disclosure of information, and the distribution or liquidation of assets must therefore be addressed separately at an early stage.

Anyone who owns real estate, other assets, or has loans should, if possible, structure the division of assets before filing for divorce. This allows for an assessment of whether a viable agreement with the other spouse can be reached—or whether claims and any necessary petitions must be prepared in a timely manner.

1. Overview After the Separation

Reaching an immediate agreement is not necessarily the first step. First, a reliable assessment of the situation is needed. Key questions include:

• What income is available to both spouses?
• What assets and liabilities exist?
• What belongs solely to one spouse, and what is jointly owned?
• Are there any real estate properties, businesses, equity interests, investment accounts, insurance policies, or assets abroad?
• What ongoing obligations exist, particularly loans, rent, maintenance, or child-related expenses?
• Was a marital agreement entered into? Are there already agreements in place or arrangements that are actually being followed?

In many cases, there is initially a lack of transparency regarding the other spouse’s income and assets. This is not merely a minor detail. Without reliable figures, it is impossible to develop an economically viable agreement or to assess what claims may even exist.

The key practical question is therefore: What is known, what is missing, and how can the information base be completed?

2. Date of Separation and Cut-off Dates

The date of separation is significant not only with regard to the divorce proceedings. It also typically marks a financial turning point. As early as this point, the income, assets, and liabilities should be documented as clearly as possible.

If spouses are living separately, each may demand information from the other regarding the other’s assets as of the date of separation. After the proceedings specified in § 1379(1) of the German Civil Code (BGB) have been initiated, information may also be demanded to the extent that it is relevant to the initial and final assets; supporting documents must be submitted upon request ( § 1379 BGB).

Reviewing the assets at the time of separation may become important later on. Significant, unexplained discrepancies up to a later asset valuation date may give rise to a need to examine changes in assets more closely. The law establishes a special rule regarding the burden of proof in such cases if the final assets are less than those reported at the time of separation ( Section 1375 of the German Civil Code (BGB)).

For the purpose of calculating the marital gain and the amount of the equalization claim in the event of divorce, the date on which the divorce petition becomes pending replaces the date of termination of the matrimonial property regime. In practice, this means that the service of the divorce petition is of considerable importance ( Section 1384 of the German Civil Code (BGB)).

Service of process is also relevant for pension rights equalization: The marriage period begins on the first day of the month in which the marriage took place and ends on the last day of the month prior to service of the divorce petition ( Section 3 of the Pension Rights Equalization Act (VersAusglG)).

For this reason, the filing of a petition for divorce should not be considered in isolation. Prior to this, matters such as assets, financing, spousal support, pension rights equalization, and any existing agreements must be evaluated in terms of their chronological interrelationships.

3. Marital Agreements and Existing Arrangements

It must be clarified as early as the first consultation whether a marital agreement or any other contractual arrangement exists. The specific wording is decisive. Many statutory provisions can be modified or excluded by a marital agreement. Only after reviewing the agreement can one assess which provisions apply to the specific separation and divorce situation.

A marital agreement is neither automatically the complete solution nor insignificant. It can, for example, have implications for the equalization of accrued gains, spousal support issues, or other financial consequences of the separation. Even then, the actual financial situation, the real estate, outstanding loans, and the feasibility of a solution must still be examined.

Equally important are agreements already in place: Have the spouses already discussed a financial separation? Are there arrangements regarding the use of the property, loan payments, child care, or child support payments? If such arrangements are actually being followed, they should be documented and assessed from a financial perspective.

4. Documents and Transparency

A complete overview of assets is rarely readily available at the outset of a separation. Nevertheless, with the right documents, it is possible to quickly establish a reliable initial framework.

4.1 Income

Pay stubs and other proof of income are particularly important. For self-employed individuals, this primarily includes existing tax returns and tax assessment notices. Income from renting or leasing property, as well as other regular sources of income, must also be recorded.

4.2 Assets and Liabilities

Information is required regarding bank accounts, brokerage accounts, insurance policies, and other assets. Existing asset statements can be helpful, even if they are often incomplete at first. Loan agreements, details on current outstanding debts, and other liabilities are equally important.

4.3 Real Estate and Businesses

For real estate, land registry extracts, details on ownership and encumbrances, and financing documents are helpful. If there is rental income, lease agreements and documents regarding income from renting and leasing are also important.

For self-employment, businesses, or equity interests, you should compile the available information on corporate structure, earnings, liabilities, and contracts.

4.4 Contracts and Agreements

The marital agreement and other agreements are just as important as correspondence or evidence of arrangements that have already been implemented in practice.

The better the actual circumstances are documented, the easier it is to decide whether to negotiate first, seek further clarification, or take targeted action.

5. Real Estate: Ownership, Use, and Financing

Real estate owned jointly or solely by one spouse is often the emotional focal point of the separation—and at the same time a significant economic risk factor. To reach a viable solution, at least three questions must be addressed separately:

• Who owns the property?
• Who will use it after the separation?
• Who is liable for and pays the financing?

These questions often overlap, but they are not identical. An internal agreement between spouses does not automatically alter the obligations toward the financing bank.

The law provides a separate set of rules governing the use of the marital home during the separation. Under certain legal conditions, a spouse may demand the use of the marital home or a portion thereof; ownership arrangements are given special consideration in this regard. In addition, compensation for use may be considered, provided this is equitable ( Section 1361b of the German Civil Code (BGB)).

Whether a spouse remains in the property therefore does not depend solely on the ownership situation. Other factors to be considered include the care of joint children, the previous living situation, financial feasibility, housing options for the spouse moving out, and whether a temporary solution or a permanent rearrangement is needed.

6. Joint Loans and Spousal Support

In cases of joint financing, the question often arises after separation as to who will continue to pay the loan installments. It is not uncommon for these to have been paid de facto by only one party while the couple was living together. Upon separation, the parties should reassess how payments are to be handled financially in their internal relationship.

If several persons are jointly and severally liable, they are generally liable in equal shares toward one another, unless otherwise specified. Anyone who pays more than their share may demand compensation under the statutory conditions ( Section 426 of the German Civil Code (BGB)). Whether and to what extent this applies in a specific separation case, however, depends on the circumstances and any deviating agreements.

Financial obligations must not be assessed in isolation from maintenance issues. Whoever lives in the property, pays loan installments, or bears other ongoing costs can significantly influence the financial situation of both spouses. Separation maintenance, child support, living arrangements, and loan obligations should therefore be examined as part of a coordinated overall plan.

Relief from joint liability to the bank is also often an important goal. However, this typically requires the bank’s consent and cannot be achieved solely through an agreement between the spouses.

7. Options for the Property

There is no one-size-fits-all solution for the jointly owned property that applies to all separation situations. The following options are particularly worth considering:

• the sale of the property,
• one spouse taking over the property,
• a temporary continuation of joint ownership,
• or, as a potentially contentious option, a partition auction. In the case of

A takeover, it is not only the transfer of ownership and any potential financial settlement that must be considered. Equally important are long-term financial viability and the question of whether the other spouse can be released from liability.

In practice, a partition auction often has a significant deterrent effect and can be a powerful bargaining chip. However, it should not be hastily viewed as a simple solution. The financial outcome, timeline, burdens, the family’s housing needs, and realistic alternatives must all be carefully weighed beforehand.

8. Assets, Debts, and Marital Gains

The statement that “assets are split in half” in a divorce is generally not accurate. A proper assessment requires a precise distinction between different levels.

First, the actual net worth must be determined. Assets may be encumbered by loans or other liabilities. Especially with real estate, the market value alone—without considering the financing—says little about the financial situation.

In addition, each spouse’s initial assets must be taken into account. The decisive factor is which assets were already in existence after deduction of liabilities at the time the matrimonial property regime took effect. Assets acquired during the marriage by reason of death, by gift, or as a dowry are added to the initial assets after deduction of liabilities, unless the circumstances indicate that they constitute income ( Section 1374 of the German Civil Code (BGB)).

Joint ownership, the actual growth of a spouse’s assets, and a potential equalization of accrued gains are therefore not to be equated. They must each be recorded separately and then evaluated in context.

9. Valuation of Real Estate and Assets

Valuation is no trivial matter in complex asset cases. It often determines whether an agreement is economically viable and the magnitude of any potential equalization payment.

For initial assets, the value at the time the matrimonial property regime took effect is generally decisive; for final assets, the value at the relevant time of the termination of the matrimonial property regime ( § 1376 BGB).

In the case of divorce, the relevant date for final assets is the date the divorce petition becomes pending, i.e., generally the date of service.

In the case of real estate, there is often no existing appraisal report for the relevant valuation date. An estimate by a real estate agent can serve as an initial point of reference, but it is not a sufficient basis in every situation. In particular, the market value, encumbrances, ownership share, and valuation date must be taken into account.

If the spouses can agree on a reasonable value, a costly appraisal may be avoided. If there are significant differences in their expectations or if large sums are involved, expert assistance may be necessary.

10. Businesses, Practices, and Equity Interests

Businesses, freelance practices, and equity interests are particularly complex assets. Their value cannot usually be determined solely from a bank account balance.

Reliable data on structure, income, liabilities, contracts, and economic development is required. Only then can it be determined whether a mutually agreed-upon and reasonable value can be reached or whether an expert appraisal is necessary.

Investment accounts, insurance policies, and assets held abroad should also be fully documented, chronologically organized, and attributed to the respective spouse. The exchange of information and appropriate supporting documents form the necessary basis for this ( Section 1379 of the German Civil Code (BGB)).

11. Spousal Support and Property Division

In practice, spousal support and property division are often interrelated, but legally they are not the same. Spousal support concerns current financial capacity and immediate needs. Property division, on the other hand, deals with other financial issues and specific cut-off dates.

Separation support and child support may become an issue as early as the time of separation. For this, the income circumstances must be sufficiently known. If they are not, the assessment requires specific information and appropriate supporting documents.

The financial burden of real estate, loan payments, or a housing benefit may play a role here. That is why it is important to distinguish between these issues professionally but to plan them strategically together.

12. Children, Custody, and the Marital Home

If minor children are involved, the impact of the separation on them should be kept to a minimum. They should not be drawn into their parents’ verbal disputes. Reliable solutions regarding care, housing, and financing are also important because they directly shape the children’s daily lives.

The child-care arrangement can be a key factor in determining the use of the marital home. Often, the parent who has primary custody has a particular interest in remaining in the familiar environment for the time being. However, this is not an automatic solution. The property must also be financially feasible; at the same time, the parent moving out needs a realistic housing plan.

In a shared custody arrangement, both parents care for the children equally. This model, too, places special demands on housing, organization, and financial viability. A good solution must therefore align with the actual care arrangements and the family’s daily life—not just with the ownership share listed in the property registry.

13. Agreement or Enforcement of Claims

The possibility of a divorce settlement agreement should be addressed early on—typically as early as the initial consultation and, at the latest, after an initial review of the documents. The goal here is not to force a final agreement immediately.

First, a realistic assessment must be made to determine whether the spouses can develop a viable solution. Key prerequisites include sufficient transparency, reliable figures, economically feasible models, and at least a limited basis for discussion.

If documents are missing, information is contradictory, or financial information is being withheld, the information base must first be improved. Only then can a serious assessment be made as to whether an agreement is possible or whether claims must be prepared and enforced.

14. Proceeding Without an Agreement

If no agreement can be reached, you should not simply wait and see. Often, at this stage, no petition for divorce has yet been filed, and therefore no legal proceedings are pending. Financial matters, particularly spousal support and obtaining information, may nevertheless already be urgent.

In such cases, it is essential to determine specifically what information and documents are needed to calculate spousal support, review financial matters, or secure other claims. If the necessary information is not sufficiently known, it must be requested in a structured manner and documented.

The goal is not to rush into escalation. The goal is to understand one’s own financial situation, to avoid being caught off guard by potential actions taken by the other spouse, and to choose the most appropriate sequence of negotiation, clarification, and enforcement.

15. The Initial Consultation

A good initial consultation does not necessarily provide definitive answers to every question. However, it does provide the necessary overview:

• What financial issues and potential claims are at stake in this specific case?
• What is the priority?
• What information and documents are missing?
• What steps should be taken promptly?
• In what order should real estate, financing, spousal support, assets, agreements, and other issues be addressed?

Recommendations cannot be derived schematically from a standard case. The specific circumstances regarding assets, income, family, and contracts are always decisive.

16. Costs and Duration

The costs of an initial consultation with a lawyer are generally manageable. Unless otherwise agreed, the fee for an initial consultation with a consumer is capped at 190 euros plus sales tax ( Section 34 RVG).

During an initial consultation lasting about one hour, an initial financial overview can be established, priorities can be set, and a preliminary action plan can be developed. As the process continues, a decision must be made as to whether billing under the Lawyers’ Fees Act or a fee agreement is appropriate.

In complex cases, it is often impossible to predict exactly at the outset how long a comprehensive division of assets will take or what the total costs will be. Key factors include the scope and quality of the documentation, the financial complexity of the case, the parties’ willingness to disclose information and reach an agreement, and whether legal action will be necessary.

Seeking advice early on can therefore make financial sense: It helps prevent uncoordinated decisions, unnecessary gaps in information, and avoidable conflicts.

17. Next Steps

A separation does not automatically lead to an orderly financial separation. Those who gain clarity in a timely manner regarding income, assets, debts, real estate, loans, and existing agreements can make better decisions.

In the event of a separation—and often even when there is a serious intention to separate—it is therefore advisable to seek initial counseling early on. This provides an opportunity to assess your individual situation, identify any missing information, and plan the next steps in a timely and appropriate manner.

The sooner financial matters are addressed in a structured manner, the sooner viable agreements can be reached or necessary claims can be prepared for enforcement.

18. Frequently Asked Questions