How to deal with a house in case of divorce or inheritance

Van Hilten de Vries van Ruitenbeek Advocaten & Mediators (HVR) is a law firm specialising in family law and general practice. Based in The Hague, HVR also has a meeting point in Amsterdam.

Real estate agents, in general, tell you that three things matter where the value of a house is concerned: location, location and location. Of course we know that a house is much more than a pile of bricks.

However, in divorce mediation and legacy mediation, it is often very clear that a house is, above all, a pile of emotions.

Home is where the heart is

In divorce situations nowadays, the need to sell the matrimonial home seems more or less inevitable. Of the houses sold in the Netherlands in recent years, a significant percentage is due to a relationship ending. In 2014, for instance, it was the underlying reason for 65 percent of sales.

Letting go of both home and love

The emotions that accompany losing your home can, to some extent, be compared to what you go through when your relationship ends. Or how it impacts one’s life, especially for the children involved.

This is why, in mediation, the former spouses sometimes decide to create a bird-nesting situation, at least temporarily. This means that the children are able to stay in their familiar habitat, while the parents fly in for alternating weeks.

From my experience this can work, but only for a limited period of time - or at least as far as the parents are concerned. As soon as one of the parents starts a new relationship, a bird-nesting construction is doomed to come to an end.

But it often comes to an end earlier, as the parents want to create a new life for themselves with a responsibility for their own household only, instead of two.

Still, at least for a short period, a bird-nesting situation is generally considered to be better for the children. Another advantage of this is that the parents get to experience personally what they will ask of their children at a later point, when the children have to change houses every week due to the co-parenting situation.

Preserving the family home

As a family lawyer and mediator, I am well aware of the fact that an arrangement regarding the marital dwelling is almost always one of the challenges spouses have to deal with in a divorce situation.

Mediation and collaborative divorce offer the best conditions for creating a win-win situation. In certain situations it should be arranged with the help of a notary, as for expats it might be better to create a (new) marriage contract regarding the choice of the applicable matrimonial law. This will likely enable the best outcome and/or to make it possible for one of the two to stay in the matrimonial home.

Preserving the family home is, however, not always the goal. Dutch law does not encourage this either, at least not for a period longer than two years.

Different countries, different solutions

This can be different in other countries. In the United Kingdom, for instance, the courts are more likely to agree to the mother remaining in the family home, particularly in a situation in which a mother cannot realistically be expected to find a suitable solution for herself and her children, should the house be sold and the capital divided.

This is despite the fact that, when it comes to preserving the family home, the English courts try to cut as many ties as possible to allow both parties to move on with their lives.

The inherited house

The parental house is also often an issue in case of an inheritance. Not only does its market value have to be considered, but also its emotional value, along with possible cultural or traditional issues.

In rural areas, for instance, it is often still common practice for the eldest son to be allowed to continue the family business from the house or farm, as a consequence of which he will inherit much more than the other siblings.

Dealing with a "cows first, children next" family situation can become complicated, especially when the family business is sold by the eldest son eventually - either voluntarily or due to expropriation - at a pleasant price.

Western family traditions

In Western Europe’s major cities, the idea of caring for one’s aging parents, along with the family traditions about the inheritance of assets from generation to generation, appear to be fading a little.

An increasing number of people consider themselves to be autonomous, or part of a "framily" (combination of friends and family).

Non-western family traditions

On the other hand, from one of my Russian clients I learned that, when her father retired as a general from the Russian army, he received - as an extra form of pension - an apartment in Moscow.

It had to be registered as common property for him, his wife and his children. This is apparently a common practice, as I understand, aimed at securing the children’s inheritance.

Perception management is therefore an important tool in successful mediation.

Cross-border inheritances

My expat clients who are accustomed to moving once in a while - even across continental borders - and who therefore might not seem to attach to a house easily, often own a house in their home country.

This house becomes the only anchor in a challenging life, for the whole family, including the children. In other words, it is much more than a pile of bricks that is to be taken into consideration as part of an inheritance. And I am not even going to go into the legal jungle of cross-border inheritances.

Cross-border legacies

The European Union recently introduced new regulations with the aim of simplifying cross-border inheritances, but there are still many tax issues left. Assets, for example, are still treated differently for tax purposes in different countries.

In some countries houses are considered "in situ" goods, while bank accounts are not. This means that the inheritance of a one-million-euro house, with a mortgage of one million euros and equities of one million euros, is treated differently than the inheritance of only a house that is worth one million euros.

International assets and inheritance

From the Financieel Dagblad I learned that one out of 10 Dutch inheritances nowadays involves international assets, meaning that the tax consequences should be checked... and on time.

If the international tax law or the international inheritance law consequences or the social and emotional dimensions are not acknowledged in time, this will not seldom lead to conflict.

And if there is enough money involved, it can escalate dramatically. In inheritance issues, the clash that can ensue is often even worse than in divorce situations.

The complexity of inheritance

Professionals who are involved in conflicts regarding inheritances are realising more and more that these conflicts are not only the consequences of growing legal complexity, but also of existential issues and social complexity.

The Stichting Nalatenschapsmediation was created with this in mind. Founded in 2011 in the Netherlands, it is aimed at stimulating Alternative Dispute Resolution for inheritance issues and conflicts between generations.

Focusing on the positive

As a family lawyer I always try to empower my divorce clients, by making them consider divorce as a transfer from married life to a life after marriage. I also try to make it clear that allowing some time for mourning is an essential part of the healing process.

However, where issues of inheritance law are concerned, positive thinking and empowerment are often not enough - as the issues are rather existential. Even if you break with family, you still have this family.

Especially when family businesses are involved, a quote from Gustav Mahler seems appropriate. He said that "Family tradition stands for passing on the fire, not worshipping the ashes". It sometimes helps to remind ourselves of this.
 

Edith van Ruitenbeek is a lawyer/mediator and partner of HVR. For more advice on divorce:
› Contact Edith directly
› Schedule a free 30-minute introductory interview in The Hague or Amsterdam