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Property division in divorce is generally governed by the Property Relations Law and the principle of resource equalization, which grants each spouse the right to half the value of assets accumulated during the marriage, unless a prenuptial agreement exists. Couples married before 1974 are subject to the "presumption of sharing", which may extend sharing to external assets such as inheritances or pre-marital property, provided that a specific intent to share that asset is proven.

• What is resource equalization in divorce and when and how is property divided?
• Division of assets in divorce
• Division of pension in divorce
• Division of a training fund in divorce
• Division of shares in divorce
• How does a prenuptial agreement change the rules?
• Why is it important to consult a family law attorney?
• Frequently asked questions

Property division in divorce is a legal process designed to settle the distribution of all assets, financial resources, and debts accumulated during the marriage and shared life. By its very nature, dissolving the economic partnership that existed between spouses is a complex and emotionally charged process, which frequently becomes a significant point of contention in divorce proceedings.

After all, property and capital provide us with financial wellbeing, security, and peace of mind — and parting with them is not always easy, especially when it is in favour of a former partner.

In this article we present a detailed overview of property division within divorce proceedings. We will understand the main legal issues and how the parties can best exercise their rights.

What is resource equalization in divorce and when and how is property divided?

Property division in divorce proceedings in Israel is generally carried out in accordance with the Property Relations Law and the principle of "resource equalization" enshrined within it. This principle establishes that spouses are entitled to half the total value of the assets accumulated during their shared life. In addition, couples who married before 1974 are subject to the "presumption of sharing" — a legal doctrine providing that the very fact of shared life and shared effort creates equal ownership of assets accumulated during the marriage. Unlike the resource equalization arrangement, this presumption may also apply to assets acquired before marriage or received as inheritance, as long as a specific intent to share them is proven.

The most efficient way to carry out the process is through a formal divorce agreement that has received the court's stamp of approval.

Principles for determining the date of division

Formally, the division is meant to take place on the day the marriage is dissolved, but in certain cases it is possible to carry it out before the get (religious divorce) is granted, including in the following circumstances:

· When more than a year has passed since the formal legal proceedings were opened.

· If the spouses are actually separated and have been living apart for at least nine months.

*Please note: The date of separation may constitute the point in time that determines when joint asset accumulation ceases. This means that everything accumulated thereafter belongs solely to the party who accumulated it.

Stages of the property division process between divorcing spouses

In practice, property division is carried out in three main stages:

1. Mapping stage: First, all financial information and data regarding the joint property and debts accumulated during the shared marriage are compiled. The rationale is that one must understand what property exists before determining how to divide it.

2. Valuation: Next, the financial value of the joint property is assessed. For this purpose, professionals such as appraisers and actuaries are engaged.

3. Offset and equalization: Finally, the division is carried out based on calculating the total value of the assets and dividing them equally between the two spouses. When one party holds assets of greater value, they transfer to the other party an "equalization payment" in the form of cash or another asset.

What constitutes "joint property", what constitutes "separate property", and what law applies to each?

"Joint property" is defined as all property accumulated during the shared life, from the eve of the marriage until the moment of separation.

Joint assets may include bank accounts, savings and capital investments, provident funds and various types of funds, vehicles, residential properties, joint businesses, and even social benefits and pensions.

Conversely, assets that each party accumulated before the marriage, or assets explicitly excluded under a valid prenuptial agreement, fall under the definition of "separate property" (or "external assets").

These include assets such as inheritances and gifts that each party received while single. These separate assets will remain outside the division agreement.

Important to know: The distinction between joint and separate property is not always straightforward, as there may be cases where assets accumulated before the marriage are nonetheless considered joint property. We will touch on this further below.

Division of assets in divorce

Division of an apartment in divorce

Frequently, the residential apartment in which the spouses live, or other real estate properties in their possession, becomes the focal point of dispute in the property division process during divorce.

This is because homes and residential apartments are generally the most valuable joint assets, and also the most significant both sentimentally and practically.

What happens when the apartment is registered in one spouse's name only?

If the residential apartment is registered in one spouse's name, the question at hand for the purposes of determining its division is whether it constitutes joint or separate property.

As noted, under certain conditions, property accumulated before the wedding may still be considered joint property.

A common example of such a case is when one party purchased a residential apartment while single, but mortgage payments and improvement of the property were made from the couple's joint funds after they married.

In such a situation, the court may rule that the property is fully joint, and therefore its division will be carried out equally between the spouses.

Dissolution of co-ownership in real estate — implications and process

Dissolution of co-ownership in real estate is the legal process through which a residential property is divided, when one of the spouses has expressed an interest in divorce and in selling the property.

Under Israeli law, a spouse who is considered a co-owner of a property may petition for its sale and a share of the proceeds.

Dissolution of co-ownership in real estate is carried out by filing a formal claim in a family court, or alternatively in a rabbinical court.

Property division in divorce with children

The presence of children does not generally change the court's decision regarding the division of an apartment in divorce, but it may affect the timing of the property's sale.

Ownership rights in the residential apartment are generally divided equally between the divorcing spouses, but at the same time the court will place the children's best interests at the top of its list of priorities.

This means that in certain cases, the court may order a delay in dissolving the co-ownership, in order to ensure a safe and stable roof over the heads of the couple's children.

Division of pension in divorce

Social and pension rights are considered joint assets in every respect, even if they are registered in only one spouse's name.

In accordance with the provisions of the Pension Savings Division Law, each party is entitled to half the rights accumulated during the shared life.

The division is generally carried out in accordance with a professional opinion from an actuary, who is able to calculate the precise value of the assets.

Division of a training fund in divorce

A training fund accumulated during the shared life is generally considered an equalizable asset in divorce. As a rule, only the portion accumulated from the date of marriage until the date of separation is included in the division, while accumulation before the marriage or after the date of separation will generally remain outside the equalization, unless there are special circumstances or a specific intent to share is proven.

Division of shares in divorce

Shares accumulated during the marriage are generally considered an equalizable asset in divorce. In most cases, half the shares themselves are not transferred; instead, their value is calculated, and the other spouse receives their share through an equalization payment or an offset against other assets.

An important note — for shares in a private company, start-up, family business, or employee options, the method of calculation can vary greatly from case to case, particularly around questions of valuation, tax, the date of separation, and future rights.

How does a prenuptial agreement change the rules?

The Property Relations Law and the resource equalization principle do not apply if the spouses signed a prenuptial agreement, provided that the agreement was indeed signed lawfully and is legally valid.

A prenuptial agreement is a voluntary contract that arranges property division in advance, in the event that the spouses separate in the future.

Its primary advantage lies in its ability to prevent future disputes and ensure financial certainty for both parties. If a separation occurs, the spouses will know exactly what they are entitled to in material and financial terms.

The agreement's validity is conditional on approval by a competent judicial authority — that is, the stamp of a family court or rabbinical court.

Why is it important to consult a family law attorney?

Managing divorce proceedings and property division without legal guidance from an expert family law divorce attorney exposes both parties to legal and financial risk alike, and is therefore strongly inadvisable.

Those who choose to embark on this journey without professional legal backing may lose valuable rights along the way — for example, due to an undervaluation of the joint assets and their worth.

An expert family law attorney is a qualified professional who possesses the legal knowledge and expertise required to carry out a process that is as safe and fair as possible, in accordance with Israeli law.

Close legal guidance in divorce cases allows the spouses to build a personalised plan of action that ensures maximum protection of both parties' interests, without unnecessary complications.

Frequently asked questions

Does infidelity affect property division?

The answer is no. Under the Property Relations Law, infidelity does not constitute grounds for any change in property division, and joint assets will be divided equally regardless of who is "at fault" for the breakdown of the marriage.

How long does the property division process take?

The duration of the property division process depends on the degree of agreement between the parties. The process can conclude within a matter of weeks. However, if there are deep disputes, it may last months or even years.

What is the difference between property division in divorce at a rabbinical court versus a family court?

The main difference is that the rabbinical court may place different emphasis on matters of the ketubah or gifts given to one of the parties, compared to a family court.

The information in this article is general information only and does not constitute legal advice, a legal opinion, or a substitute for professional guidance. Divorce proceedings may vary from case to case, depending on personal circumstances, family structure, financial aspects, and relevant legal issues. Therefore, before making any decisions or taking any steps, it is recommended to consult a qualified attorney for an individual examination of the case and personalised advice.