During a divorce, you may be tempted to keep quiet about certain property to keep it out of the divorce settlement. This is particularly so if the other spouse has no knowledge of the property. However, Dutch law has a harsh penalty for the concealment of property during divorce.
According to Article 3: 194 paragraph 2 of the Dutch Civil Code, a spouse that “deliberately conceals, hides or obscures property belonging to the marital property” forfeits his or her share in that property to the other spouse. So, if the other spouse later finds out that goods or money have been concealed, then the person who has concealed them loses the whole property!
Precisely because spouses depend on each other for information about the existence of the communal property, Dutch law judges unfair practices harshly. However, if a different law is applicable to your marital property, any actions will be judged according to the applicable law.
Prenuptial or postnuptial agreement
Parties may have to make a financial settlement at the end of their marriage according to a prenuptial or postnuptial agreement. If goods are concealed from the settlement, article 1: 135 of the Dutch Civil Code provides the same sanction as above.
Requirements for forfeit of share
As the sanction for concealment is so severe, the legislator has attached a number of strict requirements to this rule.
The spouse who has concealed or obscured property must know that it belongs to the community of property. The concealment must be a deliberate action. For example, a spouse may believe in good faith that a foreign inheritance does not belong to the matrimonial property, because this is usually not the case in the Netherlands.
There is often discussion about what the other spouse did or did not know before the divorce. If a spouse has already received information before the division of the marital property, there will not usually be any concealment. Of course, the information provided has to be correct.
In addition, the Dutch Supreme Court has ruled that due to the severity of the sanction, the burden of proof for the injured spouse is heavy. Just claiming that an item was concealed is never enough. The plaintiff will have to prove that there was a deliberate attempt to defraud the other party. It is therefore common that a spouse fails to prove that a property has been deliberately concealed. If the property was communal, the spouse can still claim half of the value if it was not divided during the divorce.
Examples of concealment
The concealment of, for example, foreign bank accounts or insurance policies can be relatively easy to establish. If they belonged to the community of property at the time of division and have been deliberately concealed, then the total value will be forfeit to the other party.
In many cases, however the situation is not black or white.
In a case from 2018 at the court of appeal in ‘s-Hertogenbosch, the wife had withdrawn cash from a joint savings account several times in the year before the divorce. In total this involved an amount of € 36,200. The husband claimed that the wife was still hiding this amount at the time of the divorce. The wife stated that she had spent the money long before the divorce and that the money was therefore gone. However, the husband had also discovered that the wife had rented a bank vault during this period. The court considered as follows:
“The woman has not been able to provide a satisfactory explanation for the fact that in the face of the divorce and in particular in the period prior to the time when she filed for divorce, she has withdrawn large sums of money from the joint account of the parties. The mere explanation that the grief of a bad marriage that is nearing its end was compensated by pleasant outings and enjoyment is, without substantiation, which is lacking, insufficient. The woman would have been expected to make it clear how she spent the cash (for example by means of receipts, receipts, invoices, tickets, entrance tickets, etc.).”
The appeal court also took into account that the wife did not have an explanation for renting the bank vault. The appeal court forfeited the amount and ordered the wife to return the amount to the husband in full. Incidentally, the lower court had previously ruled that there was insufficient evidence to convict the wife. According to the lower court it was plausible that the money had already been spent. Therefore, there was no concealment of property at the time of divorce.
Forfeiting goods can also literally mean that the concealing spouse has to hand over the goods themselves. A case from 2019 at the court of Alkmaar concerned a dowry.
Parties each accused each other of hiding jewellery given to the wife as a dowry. Under Dutch law, a dowry belongs to the matrimonial property. Based on WhatsApp conversations between the parties, the court determined that the jewellery was in the husband’s possession before its “disappearance”. He stated in the WhatsApp conversations that he had removed the jewellery from the marital home and stored it safely. His story that the wife had removed the jewellery from the marital home a just few days later, was therefore considered unlikely by the court. The man forfeited his share and was sentenced to hand over the jewellery to the woman. The court also imposed a hefty fine for non-compliance.
In this case, the woman had documented each piece of jewellery and its value well. If it is not clear exactly which items are to be returned, a judge will generally not be able to pronounce a specific order to surrender property.
Any claim does not expire
It may be years later before it is discovered that property has been concealed. There is no statute of limitations on a claim to marital property. If an asset belonging to the marital property has been passed over in the divorce, a party can apply for division at any time. As the property was never divided, it is also possible to claim the forfeiture.
How we can help you
At Dutch Divorce Lawyer, we regularly litigate divorces. Therefore, we can advise you whether a claim for concealment of property may be successful or not. We also regularly advise whether property, within or outside of the Netherlands, is part of the marital property based on Dutch law.
Please contact us for more information.