Marital allowance
Marriage-related benefits are financial or material transfers between spouses that are made without the immediate expectation of consideration and in reliance on the continued existence of the marriage. This form of gift differs from conventional gifts in that it reflects specific motivations arising within the marital relationship and has special legal features.
There are many reasons for transferring assets within a marriage or family.
Tax advantages: The transfer of assets can offer tax advantages in certain circumstances, both in terms of income tax and gift or inheritance tax. Well-known keywords are the so-called marital property swing or the real estate swing. It can also serve to prepare the further distribution of assets within the family. Such arrangements are often initiated by tax advisors.
Another motive is to protect the family assets from potential creditors or in the event of insolvency. Marriage-related benefits also serve to secure important assets within the family and protect against claims to a compulsory portion.
Securing a partner’s retirement provision or promoting the relationship as a community of destiny and economic community is also a motive.
Typical examples are
- The construction or purchase of a shared home
- The transfer of co-ownership shares in real estate
- Investments in the family business managed by a partner
- Marital property swing
Marriage-related benefits raise special legal issues, particularly in the event of divorce. The recovery of such benefits is complex without regulation and depends on the circumstances of the individual case. As a rule, reclaims on the grounds of frustration of contract or gross ingratitude are only possible under strict conditions.
A marital property regime swing serves to avoid a gift: It usually takes place in two stages: (1) First, a change from the statutory matrimonial property regime to the separation of property regime takes place by means of a marriage contract, which results in an equalization of the accrued gains, which is also regulated. (2) In a second step, the spouses also switch back to the statutory matrimonial property regime by means of a marriage contract. This improves the statutory inheritance ratios compared to the separation of property. In addition, new gains may arise in the future that can be transferred tax-free. This model enables tax-optimized equalization if the assets are unevenly distributed between the spouses. This is because the statutory equalization of accrued gains is tax-free in accordance with Section 5 (2) ErbStG. Upon termination of the statutory matrimonial property regime (change to separation of property), such an equalization of gains arises in accordance with the law (Section 1378 (3) BGB).
In many cases, the matrimonial property regime swing only serves to prepare further transfers so that the children’s tax allowances can be better utilized after each parent.