İzmir Marital Property Lawyer and Liquidation of the Property Regime

When a marriage ends, the fate of the assets acquired during the shared life is usually what generates the most dispute. As an İzmir marital property lawyer, we provide legal support in the liquidation of the property regime, participation and value increase share claims, protective remedies concerning the family residence and the recovery of jewellery.

Marital property division is not, as is popularly assumed, the physical splitting of assets in two. The law treats each spouse's estate separately; the debts relating to the assets acquired during the marriage are deducted from their value, and the other spouse is granted a claim over the remaining residual value. The dispute therefore usually turns not on who holds title, but on which category an asset falls into and what that asset is worth at the moment of liquidation.

The consequences of that distinction are serious: depending on when it was bought and what funded it, the very same immovable may fall entirely outside the calculation in one file and be the largest item of the liquidation in another. Work therefore begins by examining land registry records, bank account movements, loan repayment schedules and any matrimonial property agreement together. We address the divorce proceeding itself on our divorce and family law page; this page focuses solely on the property side.

Turkish law recognises four matrimonial property regimes: one statutory and three optional. The table below summarises them and the basic outcome each produces when the marriage ends.

Participation in Acquired Property: Personal Property and Acquired Property

From the date it entered into force, the Turkish Civil Code has adopted participation in acquired property as the statutory matrimonial property regime. Where the spouses have not concluded an agreement before a notary, this regime applies automatically. For couples married before the new code entered into force the position is twofold: the period from the date of marriage until the new code took effect is governed by separation of property, the statutory regime under the former code, while the period after that is governed by participation in acquired property. In long marriages the calculation must therefore be split into two separate periods, and the cut-off date is taken from the entry-into-force provisions of the law.

At the core of the regime lies the division of each spouse's estate into acquired property and personal property. Acquired property means the values a spouse obtains for consideration while the regime continues: earnings from work, payments made by social security or social assistance institutions, compensation paid for loss of working capacity, the income of personal property and values replacing acquired property all fall within it. These are the only items that enter the participation calculation.

Personal property falls into four main groups: items serving only one spouse's personal use, assets belonging to the spouse at the start of the regime, values obtained by inheritance or without consideration, and claims for non-pecuniary damages. An asset bought to replace personal property that was sold also retains its personal character, a mechanism known as substitution. Being able to trace, through bank records, which funds paid for an immovable is therefore the technical detail that decides a file. We set out the basic framework with examples in our guide on marital property division in divorce.

The law also introduces a presumption: assets whose ownership cannot be proved are deemed to be in the joint ownership of the spouses. Where a spouse asserts that a particular asset belongs to them, the burden of proof lies with that spouse. In practice most files knot precisely here, in the absence of documents. Keeping a record of the transfers, sales and loan repayments made during the marriage forms the basis of the technical examination in any later action.

Participation Claims and Value Increase Share Claims

The participation claim is the principal item of the liquidation. The calculation proceeds in order: the value of each spouse's acquired property at the moment of liquidation is established, the debts relating to that acquired property are deducted, the additions and equalisations provided by law are made, and the remainder is called the residual value. Each spouse is entitled to the rate set by law over the other's residual value; that rate is laid down in the Turkish Civil Code and is confirmed from the current text in the particular file. Where both sides hold claims, these are set off and only the difference is paid.

The moment of valuation directly affects the outcome. In a divorce the property regime ends as at the date the action was filed; the assets, however, enter the calculation at their market value at the moment of liquidation. In other words, which assets enter the calculation is set by the date of the action, while the figure at which they enter is set by the current value nearest the judgment. In inflationary periods this distinction markedly changes the result, so expert valuation of immovables and vehicles is all but unavoidable.

The value increase share is a separate claim covering a narrower field. Where one spouse has contributed, without receiving any or adequate consideration, to the acquisition, improvement or preservation of an asset belonging to the other, they may claim a share of the increase in that asset's value at liquidation, in proportion to the contribution. The classic examples are loan instalments on a home that is one spouse's personal property being paid out of the other's income, or substantial renovation of an inherited house funded from joint savings. Where the asset has lost value, the initial value of the contribution is taken as the basis.

For the separation-of-property period preceding the change in the statutory regime, a contribution claim comes into play. Unlike the participation claim, this one requires the contribution actually to be proved; payslips, bank receipts, sale contracts and witness statements are used. In long marriages all three claims (participation, value increase share and contribution) must be raised separately in the same petition and broken down by period; omitting one of them may cause the loss of that item.

The Family Residence Annotation and the Home in the Liquidation

The family residence is the shared home the spouses, and their children if any, live in and have chosen together. The law grants it special protection: even the spouse registered as owner may not transfer the residence, restrict rights over it or terminate the lease without the other spouse's express consent. This protection is independent of ownership; its purpose is to prevent the family's housing arrangement from being destroyed by a unilateral transaction.

To make that protection work strongly against third parties as well, an annotation of family residence is requested on the land registry. The application is made to the land registry office with documents showing that the property is the family residence (a residence certificate from the local headman, population records, utility subscriptions and bills); if the request is refused, a decision is obtained from the family court. The annotation does not change ownership; it makes the owner spouse's power of disposition conditional on the other spouse's consent. We describe the procedure step by step in our article on the family residence annotation.

Even without an annotation, a third party who knew or should have known that the property was the family residence cannot rely on good faith; the burden of proof, however, becomes heavier. At the liquidation stage, if the residence is acquired property it enters the calculation at its value and, as a rule, its ownership is not split automatically. On death, the surviving spouse may request a right of habitation or usufruct over the shared home, set off against the participation claim. We carry out the technical assessment of land registry records, mortgages and transfers together with the real estate law side of the practice.

Jewellery and Wedding Gifts: Recovery Claims and Proof

A claim for jewellery is separate from the liquidation of the property regime and rests on a different legal basis. In settled case law, jewellery specific to women is treated as belonging to the wife as a rule, regardless of who it was pinned on at the wedding. The claim may be raised together with the divorce action or brought as a separate action; since it is not ancillary to the divorce, it attracts court fees calculated on the value claimed.

What decides these cases is proof. The claimant must show that the jewellery existed and that it remained with the other party; wedding video recordings, photographs, jeweller receipts, bank safe deposit records and witness statements are the evidence most often used. Where the defence asserts that the jewellery was converted into cash with consent and spent on joint needs, the burden of proving that assertion lies with the party raising it. We examine this in detail in our article on who owns wedding jewellery.

The claim is in principle for return in kind; where return in kind is not possible, the monetary equivalent is sought. Because the date by reference to which that value is set, and the way the claim is framed, directly affect the outcome, it is common practice to frame a graduated claim in the petition: return in kind, failing which the monetary equivalent. As for items pinned on the groom, local custom and the concrete circumstances of the case are assessed together, so each file must be examined according to its own evidence.

Matrimonial Property Agreements: Before and During the Marriage

The document popularly known as a marriage contract is, in legal terms, a matrimonial property agreement. It may be concluded before the marriage or while it continues, and it may later be amended or terminated. The formal requirement is strict: the agreement is drawn up or approved before a notary. The chosen regime may also be declared in writing during the marriage application. A breach of form invalidates the agreement, and the parties remain subject to the statutory regime.

Freedom of contract is not unlimited. The spouses may choose only one of the regimes listed in the law: separation of property, shared separation of property or community of property. A mixed regime not provided for by law cannot be created. Within the chosen regime, however, arrangements are possible to the extent the law permits; for example, acquired property arising from the practice of a profession or the operation of a business may be treated as personal property, or the income of personal property may be excluded from the calculation. We set out the scope of such agreements in our article on the marital property agreement.

Such agreements arise particularly where one spouse holds shares in a company, a family business is passed between generations, there are children from a previous marriage, a liberal profession is practised, or one spouse held significant assets before the marriage. Because it draws the framework of a future dispute in advance, the agreement gives the parties predictability. Drafting the text within the limits the law permits, and in clear terms, forestalls later arguments about invalidity.

Measures Against Asset Concealment: Land Registry Annotations, Injunctions and Simulation

One of the most frequent problems in a divorce is a spouse transferring assets to third parties before the liquidation. The law anticipates this and identifies two categories. The first is gratuitous dispositions, other than customary gifts, made without the other spouse's consent within the period the law sets before the end of the property regime. The second is transfers made while the regime continued with the intention of reducing the other spouse's participation claim. In both cases these values are added back to the acquired property and taken into account as though the transfer had not occurred.

Adding the value back may not by itself be enough. If the debtor spouse's remaining assets do not cover the participation claim, an action may also be brought against the third parties who benefited, limited to the shortfall. That action is subject to preclusive periods set by law, running from the moment the injury to the right is learned of and from the end of the property regime. Where it is asserted that a transfer was a sale in appearance but a gift in substance, an allegation of simulation arises; the enquiry then covers whether the price was genuinely paid, the source of the funds and the closeness of the parties.

In practice, taking protective steps early is decisive. When filing the action, or during the proceedings, an interim injunction annotation may be requested on the land registry records of the immovables subject to liquidation; the legal position of a later acquirer then changes even if a transfer takes place. Corresponding measures may be sought over the traffic registry for vehicles and the share ledger for company shares. Injunctions are granted, as a rule, against security, and the request must be supported by concrete facts such as a sale listing, a title search or a power of attorney having been issued.

Where asset concealment is suspected, the documents to gather at the first stage are:

• Land registry extracts showing immovables registered in the spouse’s name and those recently transferred
• Registry records for vehicles, boats and similar movables subject to registration
• Company shareholdings, trade registry records and share transfer agreements
• Bank account movements, credit card statements and safe deposit box records
• The sale contract, payment documents and powers of attorney relating to the transfer

Liquidations Involving Company Shares, Pension Savings and Businesses

Files containing company shares form the technically most demanding group. A shareholding acquired during the marriage is, as a rule, treated as acquired property; that does not, however, mean the other spouse becomes a shareholder. The participation claim is a monetary claim: the spouse claims not the share itself, but the statutory proportion of the share's value at the moment of liquidation. To establish the company's real value, an expert examination is carried out over the balance sheet, income statement, shareholders' current account and asset inventory.

In valuing the shares, whether the company was founded before the marriage, what funded the capital increases and whether the shares were transferred are each examined separately. The increase in value during the marriage of a shareholding held beforehand may produce different outcomes depending on the source of that increase. In family companies, whether share transfers were genuinely made for consideration is likewise contested. The technical work on corporate structure, share transfers and shareholder relations is carried out in parallel with the liquidation calculation.

For pension savings the law provides a distinct method. Payments made by social security or social assistance institutions are, as a rule, treated as acquired property. Where, however, a lump-sum payment by such an institution or compensation for loss of working capacity is concerned, it is not the whole amount but the capitalised value of the portion that would have fallen after the end of the property regime, had it been paid as a lifelong annuity, that is counted as personal property. For private pension savings, the assessment is made to the extent of the contributions paid during the marriage.

The mode of payment also affects the practical outcome. The participation claim and the value increase share are, as a rule, paid in money; by agreement they may be paid in kind, in which case the market value of the assets is taken as the basis. Where payment would harm the economic integrity of the debtor spouse's business, the law allows an appropriate payment period to be granted, bringing security and interest into play. In files with high business values, discussing the payment plan from the outset reduces the problems that arise at the enforcement stage.

The Separate Procedure of the Divorce and Property Regime Actions

Liquidation of the property regime is not part of the divorce action but an independent one. It may be filed together with the divorce; no decision on liquidation can be given, however, before the divorce judgment becomes final. The court therefore usually treats the finalisation of the divorce as a preliminary question. Once the divorce judgment is final, the property regime is deemed to have ended as at the date the action was filed, and the snapshot of the assets is taken as at that date.

The actions are heard before the family court; where there is no family court, the civil court of first instance sits in that capacity. In İzmir the family courts operate at the courthouse campus in Bayraklı, where file traffic is heavy. On jurisdiction, the law relies on criteria such as the spouses' last place of residence; since objections to jurisdiction may be encountered in liquidation claims filed while a divorce is pending, determining the competent court correctly before filing avoids lost time.

Because its subject matter is the payment of a sum of money, the liquidation action attracts fees calculated on the value claimed. Where that value cannot be known precisely at the outset, whether to proceed by way of an indeterminate claim or a partial action is assessed according to access to records and documents; the wrong choice may cause loss of rights in respect of interest and limitation. As approaches differ in practice on the date from which interest runs, it matters that the interest claim be raised clearly and separately in the petition.

The time limits for the claims must also be tracked. As the Civil Code sets no special period for the participation claim and the value increase share, the general limitation period applies and starts to run, as a rule, when the divorce judgment becomes final; claims directed at third parties are subject to much shorter preclusive periods. Where the marriage ends with the death of a spouse, the liquidation is conducted together with the heirs and becomes intertwined with the estate account, which makes an inheritance law assessment necessary as well. You can see the other fields we work in on our practice areas page.

Documents Requested When Preparing a File

To build the liquidation calculation soundly, records documenting the period between the date of marriage and the date of the action are gathered. Land registry records and encumbrance details, vehicle registration records, bank account and loan statements, payslips, trade registry records, insurance and pension documents, and any matrimonial property agreement fall within this scope. For records that cannot be obtained directly, a court request is sought; stating clearly in the petition which record is required from which institution therefore shortens the process.

Property Arrangements in an Uncontested Divorce

In an uncontested divorce the parties may arrange their property claims in the protocol. If the protocol contains a mutual waiver regarding the liquidation, filing a later action for the participation claim becomes difficult; where it is silent on the point, or regulates only certain assets, the route may remain open for the items left unaddressed. Writing clearly which claims the protocol covers and which it leaves outside its scope is aimed at preventing disputes that may arise later.