Divorce and money: consequences to bear in mind

While things are going swimmingly well, many couples push thoughts of separation to the back of their mind. However, the sobering reality is different: in Switzerland, two in every five marriages end in divorce.

Carefully separated accounts

That's why it's so important to consider the financial consequences of divorce in advance. This gives you the leeway to secure your own financial future.

You need to take a real interest in your joint finances and matrimonial property/asset law to keep track of everything properly. This includes having separate bank accounts for personal expenses and a joint account for fixed costs.

Marital vs. personal assets

What happens to your personal assets in the event of divorce depends on your marital property regime. The most common of these is joint ownership of acquired property. This applies automatically upon marriage unless the spouses have entered into a marital agreement.

In the event of divorce, all assets gained during the marriage - known as "acquired property" - are divided equally, regardless of who earned how much.

This is different from personal property; the assets that the spouses each brought into the marriage or acquired later through inheritance. Even in the event of divorce, all personal property remains the exclusive property of the respective partner.

Leeway for private retirement provision

Retirement assets are generally affected by divorce too. However, there are differences in terms of allocation between the pillars: OASI (1st pillar) and pension funds (2nd pillar) are part of mandatory pension provisions. Equitable division of pensions on divorce always applies here.

This means that the savings accumulated during the marriage must be split 50:50 - and even a prenuptial agreement can't change this.

In contrast, the 3rd pillar is part of private pension provision. In the event of divorce, this is subject to marital property law. If the spouses have agreed to separation of property, 3a assets aren't normally divided. However, a marriage agreement, which is a prerequisite for the separation of property, can provide for a different kind of solution.

If you want to assert a claim to your income and assets solely for yourself in the event of divorce or want to divide them differently, you can stipulate this in a prenuptial agreement.

Tip: It's a good idea to maintain a certain degree of financial independence during marriage. People who leave the labour market completely often have difficultly re-entering the workforce after a divorce. Having your own income helps, even if it's part-time.

Olivier Serex is Head of Financial Planning at Migros Bank.