Dutch law exclusion clauses

Divorce and exclusion clauses under Dutch law: inheritances

There is no global consensus as how to best divide the assets of divorcing couples. Thus, there are sharp differences between the divorce laws across countries.

Expats in the Netherlands are often in for a big surprise when they discover they have to share their inheritances with their (former) spouse.

Dutch matrimonial law and exclusion clauses

Under Dutch law, the ‘general community of property’ applies to your property. In short, this means that you share all debts and assets  with your spouse from the moment you marry.  This applies for debts and assests acquired either previous to the marriage or amassed following an inheritance or gift. This is independent of the name in which the assets or debts have been registered. This can have tremendous financial consequences when a couple decides to divorce.

However, you can avoid these far-reaching and often undesirable consequences of the Dutch ‘general community of property’. The spouses can make a pre- or post-nuptial agreement. With this, they can agree on which extent they want to share their debts and assets. The testator can include an exclusion clause in his/her will stating the inheritance will not fall into the community of property. Sometimes, this exclusion clause is automatically incorporated in the testator’s will.

An example: what happens if the husband inherits a sum of money and the couple marries in community of property?

Option 1: No exclusion clause in the testator’s will

When there is no exclusion clause in the testator’s will, the inheritance falls within the communit. This means that the wife has the right to half of it. This can lead to many conflicts when the partners get a divorce and will have to share their belongings, including their inheritances. The husband might find the situation unreasonable, especially when he is, for instance, not entitled to the inheritances of the wife.

Option 2: Exclusion clause in the testator’s will

If there is an exclusion clause in the will, the wife does not have the right to a share of the inheritance. So, no problems here. But what if the husband has (partly) spent the inheritance?! In case the husband used (part of) the inheritance to purchase the matrimonial house, he receives a refund for that particular amount. If the property increases considerably in value, the law might even entitle him to the increased value of the property. In those cases, the remaining of the inheritance and the extent to which he financed the house from his inheritance need to be established.

Now, suppose that the husband in our case used his inheritance for house hold costs or to finance a nice holiday. The wife could argue that his inheritance is exhausted, that the husband wanted to spend his money the way he did. She could argue, that therefore the law does not entitle him to restitution. In most cases, however, the judge does not accept this argument! Even if he exhausted the entire inheritance and benefited, the man can claim the amount of his inheritance.

Conclusion

These examples go to show that you should be fully aware of your situation to prevent unpleasant surprises when it comes to your inheritance.

Do you need advice on Dutch matrimonial law and exclusion clauses? Please contact us for advice.

 

Marjet Groenleer - Expat lawyer (family law)

Marjet Groenleer is an attorney-at-law and associate partner at GMW lawyers in The Hague. She has been active in family law for more than 15 years, focused on on (international) divorces. Marjet is a trained divorce mediator with the vFAS (Dutch Association of Family mediators and lawyers).

Marjet has a particular interest and a profound knowledge of the international aspects of family law. She is an expert in dealing with complex financial and multi-jurisdictional cases of an international family breakdown. Because of her experience and previous jobs, she is familiar with several foreign legal systems. A great number of her clients are expats. She understands the needs of expats working for the various international organisations and companies based in The Netherlands, specifically in the area of The Hague (lsuch as EPO, Estec, OPCW, NATO, the tribunals, ICC, Shell, etc.)

Marjet worked as a lecturer in International Civil Law for several years and at the Court of Appeals in The Hague in the family law sector. Today, she is a deputy judge in the Court of Appeals in Amsterdam. Marjet publishes regularly in professional journals and keeps you informed of the various complex aspects of (international) divorces with her weblogs.