Property Division in Divorce: Legal Insights and Strategic Considerations

עו"ד דניאל ויגלר
10 בספט׳
זמן קריאה 3 דקות

The division of property between spouses is often the most contentious and emotionally charged aspect of divorce proceedings. In many cases, it determines the financial foundation upon which each party will rebuild their life post-divorce. As such, it is critical to understand the legal framework and strategic considerations that shape this process under Israeli law.

The Legal Framework: The Spouses’ Property Relations Law

Under Section 5(a) of the Spouses’ Property Relations Law (1973), the default principle governing the division of marital property is that of equitable resource balancing. This means that upon the formal dissolution of marriage—either through divorce or death—each spouse is entitled to an equal share of the assets accumulated during the marriage.

However, Section 8(2) of the same law provides an important exception: in exceptional and rare cases, where strict equal division would result in a gross injustice, the court has discretion to deviate from this principle. Such rulings are infrequent and require compelling evidence.

What Assets Are Subject to Division?

Assets eligible for division generally include all property acquired by either spouse from the date of marriage until the "date of separation"—the point at which the couple ceases to function as a household unit. Common assets include:

Real estate
Vehicles
Business holdings
Bank accounts and savings
Pension and social rights
Shares and equity in companies
Valuable personal property

It is important to note that assets formally registered in both spouses’ names are typically divided equally. However, even assets registered in one party's name may be subject to equitable balancing.

Excluded Assets and the Importance of a Prenuptial Agreement

Certain categories of property are excluded from division by law:

Assets owned prior to marriage
Inheritances
Gifts received during the marriage

That said, the behavior of the spouses during the marriage may override these protections. For instance, if an inheritance is commingled with marital funds or invested in the family home, it may lose its exempt status.

To protect individual assets from becoming jointly owned, it is highly recommended to draft a prenuptial or postnuptial agreement. Such an agreement can clarify ownership rights and avoid future disputes.

Jurisdiction: Family Court vs. Rabbinical Court

In Israel, both the Family Court and the Rabbinical Court have jurisdiction over property disputes, but jurisdiction is determined by which court receives the first valid filing.

For example:

If a spouse files for divorce in the Rabbinical Court and includes a claim for property division, jurisdiction over the property will rest with that court.
Conversely, if a property claim is filed first in the Family Court, the Rabbinical Court will not have jurisdiction to address that issue later.

This “first-to-file” rule emphasizes the strategic importance of early legal action.

Handling Marital Debts

Debts accumulated during the marriage are generally considered joint liabilities, unless clearly incurred for personal or unlawful purposes (e.g., gambling debts). It is often necessary to establish whether a debt served the family interest, which may require thorough financial analysis.

Furthermore, a third party creditor typically cannot pursue one spouse for the personal debts of the other—unless joint liability can be proven, which can be complex in a divorce context.

The Process of Property Division

Dividing property involves a multi-step legal and financial process:

Identification and Valuation of AssetsA full accounting of all assets—real estate, pensions, businesses, etc.—is conducted. In complex cases, this may require professional valuation by accountants, actuaries, or economic experts.
Classification of PropertyAssets are classified as either subject to division or exempt, based on applicable legal rules and the couple’s history.
Equalization of ValueProperty registered under both names is split equally. Property under one name may still be balanced via monetary compensation or offsetting assets to ensure equality.

Expert Legal Guidance Is Essential

Property division can have far-reaching consequences for financial security and family stability. Attorney Daniel Wigler, a seasoned expert in family and inheritance law, brings extensive experience in representing clients through complex marital asset divisions.

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