When the Turkish Civil Code No. 4721 entered into force on 1 January 2002, it adopted participation in acquired property as the statutory matrimonial property regime between spouses. Under this scheme, values acquired while the marriage subsists are as a rule regarded as common and the division is conducted within the framework of principles laid down in advance. Unless the spouses express a choice to the contrary, their marriage is subject to this regime.
The operation of the regime rests on the separation of the assets acquired during the marriage from the assets that are personal to each spouse. Where there is a divorce, an annulment of the marriage, the death of one of the spouses or the choice of a different regime, this system comes to an end and the liquidation stage begins. In the liquidation, each spouse first withdraws his or her own personal property from the estate or from the common calculation; the other party’s participation claim is then determined on the basis of the total value of the acquired property.
The real difficulty in practice arises not from the rule itself but from determining which item falls into which group. Where what is in dispute is a rental income, an item of compensation, or the sale proceeds of an immovable purchased before the marriage, the outcome may change entirely. In this note we assess the basic principles of the regime, the way it operates and the rights it confers on the parties, from a practical standpoint.
What Is the Regime of Participation in Acquired Property?
This regime is the statutory scheme determining the criteria by which the assets obtained by the spouses during the marriage are to be divided. Under the Turkish Civil Code No. 4721, which entered into force on 1 January 2002, spouses become subject to the regime of participation in acquired property automatically unless they choose another regime before a notary. The aim is for the values accumulated within the marital union to be divided in a balanced and equitable manner.
At the basis of the system lies a twofold division of assets:
- Personal property
- Acquired property
When the marriage comes to an end by divorce or by death, the acquired property is divided equally. As regards personal property, no right of claim arises for the other spouse. Where the parties have not opted for another regime, the courts carry out the division within the framework of Articles 218 to 241 of the Turkish Civil Code No. 4721.
The thinking behind the provision is the preservation of the economic balance between the spouses and the assurance that the savings built up during the marriage are divided fairly. The parties may nevertheless move to another regime by drawing up a matrimonial property agreement (a marriage contract) before a notary, either before the marriage or while it subsists.
Which Values Fall Within the Scope of the Regime?
All the asset values obtained during the marriage fall within the scope of this regime. The principal items within its scope are as follows:
- Purchases of immovables; housing, land, vehicles and similar values purchased during the marriage,
- Wages and other earnings obtained by the spouses in return for their labour,
- Payments made by social security institutions and items of compensation,
- Rental and interest income arising during the marriage,
- Savings accumulated in bank accounts.
The assumption on which this construction rests is that the spouses conduct a single economic life together during the marriage and that the values arising in that period should be regarded as common.
The Right to a Participation Claim
When the marriage comes to an end by divorce, by death or by the choice of a new regime, the spouses’ assets are made subject to liquidation. It is precisely at this stage that the participation claim arises.
Where the assets acquired by one of the spouses during the marriage exceed those of the other, the remaining spouse may make a claim in respect of that difference. In other words, the total of the values acquired during the marriage is calculated and each spouse is entitled to half of that total.
The protective function of this mechanism is to prevent the spouse who does not participate in working life, or whose contribution takes the form of domestic labour, from suffering economic hardship at the end of the liquidation.
The Acquired and Personal Property of the Spouses
During the marriage, the spouses’ assets are gathered under two headings, acquired property and personal property. The first group consists of the values obtained within the marital union which are as a rule open to division. The second group covers values belonging solely to their owner and left out of the division.
Acquired Property
Article 219 of the Turkish Civil Code No. 4721 defines acquired property as the asset values obtained by the spouses during the marriage which will enter into the division when the regime comes to an end. The following items are regarded as acquired property within the scope of that definition.
Acquisitions constituting the return for work: All income obtained by the spouses in return for their labour during the marriage falls under this heading:
- Earnings from self-employment: the income obtained by members of professions such as lawyers, doctors and engineers in return for their independent work.
- Salaries and wages: the monthly salary, additional payments and pay-rise differences paid to the working spouse by the employer.
- Income from commercial activity: the commercial earnings obtained by one of the spouses through a sole proprietorship or a shareholding.
- Bonuses and premiums: the bonuses and awards given by the workplace on the basis of performance.
Payments falling within social security or social assistance: Certain payments received during the marriage by one of the spouses from the State or from other institutions are also regarded as acquired property:
- The retirement pension granted upon the completion of working life,
- The disability pension paid to a spouse who has lost his or her capacity to work, and social assistance of a similar nature,
- Benefits received from the State or from unemployment insurance in the event of unemployment.
Compensation paid on account of loss of the capacity to work: Where one of the spouses has lost his or her capacity to work as a result of an occupational accident, a tort or another cause and has received compensation on that account, the sum received is treated as acquired property. Disability payments made by insurance companies, compensation arising from an occupational accident and compensation obtained on account of a traffic accident may be listed within this scope.
The yields of personal property: The income produced by personal property passing to one of the spouses by inheritance, gift or a similar route is regarded as acquired property. The rental income of an immovable inherited from a spouse’s family, or the interest yield of a term deposit in his or her personal ownership, is of this nature. The distinction to be noted here is as follows: the dwelling passing by inheritance itself remains personal property, but the rental income arising from that dwelling falls into the group of acquired property.
Values replacing acquired property: Where property obtained during the marriage is disposed of and new property is purchased with the proceeds, the property subsequently purchased is likewise regarded as acquired. The sale of a vehicle bought during the marriage and its replacement with another vehicle, or the sale of a dwelling likewise obtained during the marriage and its conversion into a different immovable, are examples of this.
Personal Property
Article 220 of the Turkish Civil Code No. 4721 regulates personal property as those values belonging to one of the spouses which are kept outside the division. Unlike acquired property, these values belong solely to their owner and do not enter into the liquidation when the regime comes to an end. The items treated as falling within personal property are addressed below.
Items set aside for personal use: Items obtained directly for the use of their owner fall into this group: personal care products, clothing, jewellery and accessories and pieces from private collections may be listed.
Important note: Although items of personal use are as a rule regarded as personal property, high-value jewellery and items of a luxury nature may be separately assessed at the liquidation stage and brought within the scope of acquired property.
Values owned before the marriage: Immovables, vehicles, account savings and other values that were in the assets of one of the spouses before the marriage retain their character as personal property after the marriage is contracted. A dwelling or a car purchased before the marriage, and savings accumulated in accounts likewise opened before the marriage, are typical examples of this.
Property obtained by way of gratuitous transfer: Values passing to one of the spouses by way of inheritance, gift or a similar gratuitous transfer are regarded as personal property. A dwelling, a plot of land or commercial immovables passing from elder family members fall within this scope; money, securities or valuable items obtained by way of gift fall into the same group. Values of this kind belong, independently of acquired property, solely to the heir or to the spouse who received the gift.
Claims for non-pecuniary damages: Claims for non-pecuniary damages arising from a tort or loss directed at the person are also in the group of personal property. Compensation awarded on account of an attack on personality rights, and non-pecuniary damages received in respect of psychological harm suffered following a traffic accident, are of this nature.
Important note: Pecuniary damages paid on account of loss of the capacity to work are treated as acquired property; only claims for non-pecuniary damages are regarded as personal property.
Values replacing personal property: Where an item of personal property is sold and other property is obtained with the proceeds, the newly obtained value is likewise accepted as personal property. The sale of an inherited dwelling and its replacement with another dwelling, or the sale of a car owned before the marriage and its replacement with a new vehicle, are treated in this way.
Grounds for the Termination of the Regime
The regime of participation in acquired property comes to an end upon the occurrence of particular legal events. The termination of the regime sets the liquidation process in motion; at that stage the spouses’ assets are assessed according to the distinction between acquired property and personal property and distributed to those entitled. The circumstances that bring the regime to an end are addressed below.
Divorce or Annulment of the Marriage
Where a divorce action brought before the court results in a judgment bringing the marriage to an end, the matrimonial property regime likewise comes to an end. The division also arises in cases where the marriage is annulled on the ground of nullity, that is to say invalidity.
In the event of divorce or annulment of the marriage, the acquired property is made subject to liquidation; the participation claim is calculated and divided between the spouses.
Death of One of the Spouses
The regime comes to an end upon the death of one of the spouses and the liquidation process begins to operate together with the inheritance rights of the surviving spouse. Where the surviving spouse has renounced the inheritance, his or her claim is limited to the rights arising from the regime of participation in acquired property alone. In this process, while the surviving spouse’s personal property remains with him or her, the acquired property is divided according to the rules of the law of inheritance.
For the details of the subject, reference may be made to the note entitled The Inheritance Share of the Surviving Spouse.
Change of the Matrimonial Property Regime
The spouses may move to a different matrimonial property regime by mutual agreement. For that change to be valid, a matrimonial property agreement must be drawn up before a notary. The new regime takes effect only for the future; the assets formed up to the moment of the change continue to be accepted as acquired property.
Transition to Separation of Property by Court Decision
In certain circumstances, one of the spouses may apply to the court and request a transition to separation of property. The situations in which the court may so decide are as follows:
- Where one of the spouses restricts the administration of the common property unilaterally and without justification,
- Where one of the spouses dissipates the assets in bad faith or uses them in a manner causing loss to the other spouse,
- Where it is proved that one of the spouses is in need of economic protection,
- Where, upon a transition to separation of property by court decision, the spouses begin to administer their earnings and assets independently of one another.
Declaration of Absence and Its Effect on the Regime
Where no news has been received from one of the spouses for a long period, the court may give a declaration of absence. With that decision the matrimonial property regime comes to an end and the assets of the missing spouse are liquidated according to the rules of the law of inheritance. Should the spouse declared absent return, the division process is revisited.
Liquidation and Division of Acquired Property
The division process begins once the regime comes to an end. In this process the personal property is first separated out, and the acquired property is then made subject to liquidation.
The Concept of Residual Value
At the core of the liquidation lies the determination of the assets and liabilities relating to the spouses’ acquired property. Once that determination is complete, the liabilities are deducted from the assets. The resulting figure is termed the “residual value”. The residual value shows the net magnitude of the spouses’ assets and forms the basis of the calculation for the division.
How Is the Participation Claim Calculated?
Let us take as an example the following picture emerging after the determination of the assets and liabilities relating to the acquired property of the wife and the husband:
Residual value of the wife’s acquired property:
- Assets: TRY 600,000
- Liabilities: TRY 100,000
- Residual value: TRY 500,000
Residual value of the husband’s acquired property:
- Assets: TRY 960,000
- Liabilities: TRY 200,000
- Residual value: TRY 760,000
The participation claim is determined on the basis of these figures. Half of the residual value found in respect of each spouse’s acquired property constitutes the other party’s participation claim:
- Half of the husband’s residual value: TRY 380,000
- Half of the wife’s residual value: TRY 250,000
As will be seen, each spouse has a claim against the other. These claims are set off against one another and the remaining balance gives the sum that the creditor spouse may demand from the other. In the example that balance is TRY 130,000 (TRY 380,000 – TRY 250,000 = TRY 130,000). Accordingly, and subject to exceptional circumstances, a claim of TRY 130,000 in favour of the wife arises.
For details concerning the determination of the spouses’ rights over the other party’s assets and the liquidation of the regime, the note entitled How Is Property Divided on Divorce? Calculating the Participation Claim may be examined.
Division of Debts and Set-Off
Debts connected with acquired property are taken into account in the calculation for the division and a set-off is carried out. Debt payments made by one of the spouses in respect of his or her own acquired property are borne in mind during the liquidation. Loans used jointly by the spouses, or common debts, are established within the divorce action and each spouse’s share of liability is determined by the court.
Reduction or Removal of the Participation Claim
The participation claim is the basic instrument of calculation used in the division of acquired property. The residual value taken as the basis of that calculation determines, as a rule, the spouses’ proportions in the division. Certain exceptional circumstances may nevertheless lead to that proportion being reduced or removed altogether. Those exceptions are regulated in the second paragraph of Article 236 of the Turkish Civil Code No. 4721.
The exceptional situations under Turkish Civil Code No. 4721 Art. 236(2)
That provision permits the proportion of the share of the spouse at fault to be varied in the calculation of the participation claim to be made on account of the divorce:
Turkish Civil Code No. 4721 Art. 236(2)
“In the event of divorce on the ground of adultery or an attempt on life, the judge may decide that the proportion of the share of the spouse at fault in the residual value be reduced or removed in accordance with equity.”
Under the provision, where the divorce is founded on the ground of adultery or an attempt on life, the judge may reduce the share of the spouse at fault in the residual value on the measure of equity, or remove it entirely. This possibility is significant in that it allows culpable conduct to be reflected in the outcome of the division and the spouses’ rights to be protected fairly.
Division of Property upon Divorce
The operation of the liquidation process: The division stage begins once the divorce judgment becomes final. At that stage the spouses’ acquired property and personal property are first established, and their mutual participation claims are then calculated. As a result of the set-off carried out, the claim of one of the parties emerges.
The date to be taken as the basis: The scope of the acquired property is determined by reference to the date on which the divorce action was brought.
The parties’ freedom of arrangement in an uncontested divorce: The parties may agree special provisions concerning the division in an uncontested divorce protocol. Where a dispute arises between the spouses as to the division, the court intervenes; it resolves the dispute and orders a division that is equitable within the legal framework. It is therefore important that the arrangements agreed in the course of an uncontested divorce be lawful and balanced.
As regards the financial and economic consequences of divorce, reference may be made to the note entitled The Financial Consequences of Divorce.
Division of Property on Death and Its Relationship with Inheritance
Termination of the regime by death: Upon the death of one of the spouses the matrimonial property regime comes to an end automatically at that moment; the liquidation and the division of the estate are conducted as two processes independent of one another. Under the Turkish Civil Code No. 4721, the liquidation begins upon death and, at that stage, the surviving spouse’s statutory share in the acquired property and his or her personal property are determined. Once the liquidation is complete, the assets of the deceased spouse are divided among the heirs, including the surviving spouse, according to the rules of the law of inheritance.
The dual position of the surviving spouse: The surviving spouse is entitled both in the liquidation and in the division of the estate. In the process the matrimonial property regime is liquidated first; the share the spouse will receive takes shape according to the regime applied and the position of the deceased spouse’s heirs. Once the share arising from the regime has been set aside, the surviving spouse, holding the status of statutory heir, additionally receives a particular share of the deceased spouse’s assets. The priority rights afforded to the surviving spouse as regards the family residence and household goods occupy a special place; these rights may be secured by legal means such as the entry of an annotation on the land registry.
The difference between the two divisions: The fundamental point separating the division of property from the division of the estate is that the processes and the legal frameworks to which they are subject differ. Whereas the division of property may arise in many of the circumstances listed above, the division of the estate arises only following death. The first concerns the determination and division of the spouses’ acquired and personal property; the second has as its subject the distribution of the deceased person’s assets among the statutory heirs. Both processes are subject to separate rules and are assessed independently of one another.
The Limitation Period for the Participation Claim
Claims relating to the participation claim may be raised within 10 years from the moment the matrimonial property regime came to an end. Once that period has expired, no claim may be made.
Article 178 of the Turkish Civil Code No. 4721 provides that actions arising from divorce are subject to a limitation period of 1 year. That provision does not, however, contain any express regulation as regards grounds of termination other than divorce (such as death, annulment or a change of regime).
Since the calculation of the participation claim and the collection of the documents forming its basis can take a long time, it has been accepted in the literature and in the case law of the Court of Cassation that the general 10-year limitation period under Article 146 of the Turkish Code of Obligations No. 6098 should apply. The decision of the Assembly of Civil Chambers of the Court of Cassation dated 17.04.2013 resolved the divergences in the case law on this point and made clear that the participation claim is subject to a 10-year limitation period.
Independent Legal Assessment
Disputes over the liquidation of the matrimonial property regime often take longer than the divorce action itself and require more technical work. What is decisive in practice is not the parties’ assertions but the ability to establish the character of the asset items at the level of documents. A failure to show on what date and with funds from what source an immovable was obtained may result in a value that is in substance personal property being brought into the division.
In managing the process we recommend that the following headings in particular be prioritised:
- Documenting each asset item separately as regards its date of acquisition and its cause of acquisition
- Making the flow of funds traceable without interruption in the case of values substituted for personal property
- Not overlooking in the calculation that the yields of personal property are regarded as acquired property
- Correctly establishing, for limitation purposes, the moment at which the regime came to an end, and monitoring the 10-year period
- Where there is an allegation of adultery or an attempt on life, expressly raising the claim under Art. 236(2) in the statement of claim
- Drafting the provisions on the division of property in an uncontested divorce protocol with a clarity that will not give rise to later dispute
Independent Legal provides advisory and litigation services throughout the entire process, from the determination of assets to the conduct of an action for a participation claim, in matrimonial property disputes arising from family law.