22 April 2024
If you receive an inheritance or gift during your marriage, it is quite possible that the testator or donor has included an ‘exclusion clause’ in their will and/or linked it to the gift.
The purpose of such an exclusion clause is to exclude the acquisition from the community of property or, in the case of prenuptial agreements, from the scope of any settlement clause. Although in practice an exclusion clause is still a regular occurrence. It is increasingly added for the sake of completeness: in principle, current legislation already provides for the necessary exclusions.
If you married under a community of property, it should be divided upon divorce. In principle, the gift or inheritance acquired under an exclusion clause will not be taken into account in the division. Therefore, the spouse to whom the acquisition accrued is not obliged to share it. What they have inherited or been gifted remains their own.
But what if a gifted amount has been deposited or redeposited in the joint account anyway, and its use can no longer be traced? And what if the gift was used to meet all kinds of daily family expenses, or used to pay for a renovation or holiday, which would not otherwise have been financially possible? Should the spouse or partner who was not the intended recipient of the gift or inheritance then still have to pay half of those costs from their own funds at the end of the marriage?
Opinions and elaborations in literature and case law have long been divided. In 2019, the Supreme Court provided some clarity.
In the case in question, the money bestowed to the wife under an exclusion clause had ended up in the joint bank account and thus become part of the community of property. This created a right to reimbursement by the community to the wife. The money in the joint bank account had been used to pay the family’s general costs such as daily expenses, holidays and consumptive spending. Not all of the money was there any more.
Nevertheless, the right to reimbursement remained in full force and effect: the Supreme Court ruled that community debts had been paid with the excluded assets. In such a case, it is up to the other ‘excluded’ spouse to argue why this right to reimbursement could not or should not be monetised.
Meanwhile, the Supreme Court provided an addition to the 2019 ruling in early 2023. In principle, when a gift is received under an exclusion clause and community debts (household expenses) are subsequently paid with these private assets, a right to reimbursement arises.
However, this right is impaired if the parties have incurred costs (household expenses) that they could not pay from both their incomes. There was a lack of means to bear the household expenses, and under the law the parties are then obliged to contribute in proportion to their assets. This obligation left the wife with no right to reimbursement.
In practice, it is therefore important to keep in mind that in principle there is a right and obligation to reimbursement. It is up to the other party to provide a reasoning for why that right to reimbursement should not be monetised. But this is not easily done.
Do you have questions about the right to reimbursement of gifts and inheritance under an exclusion clause? Please do not hesitate to contact me.
