The marital property provisions of the Turkish Civil Code (the “Civil Code”) offer four distinct methods of assigning spousal control over marital property. These methods, referred to generally as marital property regimes, offer married couples options regarding their joint and several rights over marital assets including ownership of the assets, authority to manage and dispose of the assets, and sharing or dividing the assets after dissolution of marriage.
The four marital regimes under the Civil Code are: (i) participation in acquired property, (ii) separation of property, (iii) separation of property with distribution, and (iv) common property. Offering four regimes for regulating marital property provides spouses with flexibility to freely regulate their pecuniary interests before and/or during marriage, within certain limits, through a contractual agreement. Fiancées and spouses may enter into agreements to positively select a particular marital property regime, which must either be drawn up by or executed before a notary public in order to certify the signatures of the spouses. Alternatively, they may submit a petition indicating their preferred system when applying for a marriage license. In either case, spouses may later amend or terminate the agreement within certain limitations under the Civil Code. In the absence of such an agreement however, the participation in acquired property regime will be applied by default.
- The Scope of a Participation in Acquired Property Regime
In a participation in acquired property regime, all assets acquired in return for consideration by both spouses or any one of the spouses individually during a marriage, are equally owned by both spouses as “acquired marital property,” which may include the following: (i) proceeds from employment; (ii) payments made by the social security and social assistance authorities; (iii) workers compensation; (iv) income derived from personal property; and (v) property acquired to replace acquired property.
However, the Civil Code excludes personal property from acquired property under the participation in acquired property regime. A spouse’s personal property comprises: (i) assets allocated for personal use; (ii) assets belonging to one spouse at the beginning of the participation in acquired property regime or acquired later at no cost through inheritance or otherwise; (iii) assets gained through moral compensation; and (iv) acquisitions that replace personal property.
However, it is important to reiterate that while personal property belongs to a particular spouse, any income form the property and any assets purchased with this income are considered acquired property under the participation in acquired property regime. For example, X and Y are married and their marital property is regulated by participation in acquired property regime. An apartment was inherited by X from his father in 2016. This apartment is X’s personal property, but the rental income acquired from the apartment belongs to each spouse equally.
The spouses may agree on modifications to a marital agreement. For example, spouses may designate that assets used for professional purposes or to conduct a business should be regarded as personal property, even if the assets would otherwise be construed as acquired property. Likewise, the spouses may determine that revenue generated from personal property should not be included in acquired property.
Within the limits of the law, each spouse retains ownership and management of his/her acquired and personal property, and each party has the right to freely use and dispose of such property. Furthermore, each party will be held liable for their own debts to third parties with their personal property, including personal assets and the part of the acquired assets to which the indebted party is entitled. It is important to note that debts existing before the marriage are separated from marital property.
A spouse claiming ownership over an asset has the burden of proof. If ownership cannot be proven, it is considered to be acquired property and is therefore under the joint-ownership of both spouses. The same applies in disputes over debt.
- Ending a Participation in Acquired Property Regime and Its Dissolution
A marital property regime may end through divorce, annulment, death of one spouse (automatically), or via selection of a different marital property regime by the spouses.
Upon divorce, annulment, or a court order for separation of property, the marriage will dissolve on the date of the lawsuit, not the date of the court decision. After the marriage ends, each spouse is entitled to keep his/her personal property but must share the acquired property equally. In some exceptional cases, like adultery or attempted murder of a spouse, a judge may decide to award one spouse a greater percentage of the marital property.
If a marriage ends due to the death of a spouse, and there is no contractual agreement between spouses, personal and acquired property will be separated and the acquired property will be shared equally, just as in a divorce proceeding. Dissolution of inheritance (distribution of the legal shares to heirs) is completed after the dissolution of the marital property.
A spouse’s portion of the total acquired assets is determined by court-appointed experts, but the Civil Code explains the dissolution and its calculation procedure in a rather complex way.
Pursuant to Civil Code, if one of the parties proves that he/she has a greater benefit than the other party; he/she may retain ownership of an acquired asset by paying compensation to the other party. When a spouse has contributed to the acquisition, improvement, or preservation of an asset belonging to the other without receiving compensation, and when that asset has increased in value at the time of liquidation, then then the spouse may claim compensation proportionate to his or her contribution, calculated according to the current value of the asset. Conversely, if the asset has decreased in value, his or her compensation must correspond to the original contribution. If such an asset had already been alienated beforehand, the claim is calculated according to the proceeds obtained and is due immediately.
When separating acquired property and individual property, the property is separated according to the value at the time of dissolution. The following are added to property acquired during marriage (i) the value of dispositions made without consideration, by one spouse, without the other’s consent, within a year preceding dissolution of the marriage, save for occasional gifts, and (ii) the value of assets disposed of by one spouse during the marital property regime with the intention of diminishing the other’s share. In practice, it is common that the husband will try to sell the assets acquired during marriage while a divorce is pending, as the assets are frequently registered in the husband’s name. This provision of the Civil Code, combined with the ability to initiate a marital property proceeding in conjunction with a divorce lawsuit to obtain an injunction over the assets, is intended to curb this practice.
Once the marital property regime has been liquidated, a spouse may claim compensation for debts incurred in connection with acquired property that have been paid with individual property or debts incurred in connection with individual property that have been paid with acquired property. Each spouse, or his or her heirs, is entitled to one-half of the surplus of the other spouse. The spouses may agree on a different proportion for the distribution of the marital property surplus. These agreements must not adversely affect the statutory inheritance entitlements of children who are not common issue of the spouses, or the issue of those children. Furthermore, to ensure that the surviving spouse may maintain his or her accustomed lifestyle, at his or her request, he or she will be granted a usufruct or a right of residence to the home in which the spouses lived that belonged to the deceased spouse, and this will be set off against his or her entitlement, but any contrary provision stated in the marital agreement is reserved. Under the same conditions, the surviving spouse may request that ownership of the household effects be transferred to him or her. Under certain circumstances, at the request of the surviving spouse or the other legal heirs of the deceased spouse, ownership of the home may be granted rather than a usufruct or right of residence.
- Applicable Law to Participation in Acquired Property (also to other Marital Regimes) and Foreign Cases
When both spouses are Turkish nationals, there is no discussion of applicable law (conflict of laws) as Turkish law is the applicable law for both the marriage and its dissolution. However, as the number of marriages between Turkish nationals and spouses of different nationalities increases, the applicable law is called into question.
For dissolution of marital property due to death, the assets of the deceased are first subject to the law applicable to the marital property, followed by the distribution of inheritance which is subject to the conflict of law rules on inheritance.
In a marital property regime, spouses have a limited choice of law under freedom of contract. Pursuant to Article 15 of the Turkish Private International and Procedural Law (“PIL”), spouses may choose the law of either one of their habitual residences at the time of the marriage. The PIL also allows the parties to choose the national law of the spouses at the time of marriage. Since spouses may have different nationalities and habitual residences, they may enjoy the right to choose among a maximum of four different legal systems. For example, when a Turkish woman residing in the Netherlands marries a Frenchman residing in Belgium, the spouses may choose between Turkish, Dutch, French, and Belgian law.
When spouses have stated no choice of law, Article 15 of the PIL states that the common national law of the spouses at the time of marriage applies, and in the absence thereof, the law of their common habitual residence at the time of the marriage applies. If none of these exist, Turkish law shall apply. Habitual residence does not need to be a place where an individual resides permanently, but should be a place where the central interests of an individual’s life reside. The reason for this is that if Article 15 of the PIL was drafted differently, for example “the law where matrimonial property is located” instead of “Turkish law,” it would make it complicated to find the applicable law and make it difficult to liquidate the marital property due to the fact that the property might be spread all over the world.
Pursuant to Article 15/II of the PIL, choice of law for immovable property is not possible. The liquidation of immovable property is subject to physical location of the immovable property. For instance, if there is movable property in London and there is immovable property in Turkey, then Turkish law is applicable for the immovable property, even if the applicable law of the marital regime is English Law. If the spouses acquire a new common nationality upon marriage, the laws of their new nationality shall apply, provided that the rights of third parties are reserved.
The Civil Code has pushed the legal system a step further with regard to the legal rights of women. The stipulation of the participation in acquired property regime as the default marital property system is an achievement in terms of the economic empowerment of women because it helps empower the wife as an equal partner with her husband. Furthermore, Turkish marital property law involves relatively complex procedures for dissolution, which may become even more complex in foreign marriage cases brought before Turkish courts.