What is a balance of resources? One of the most significant issues in any divorce proceeding is the division of the joint property between the two spouses. 

Balancing resources is the statutory arrangement under Israeli law for dividing joint property between spouses during the divorce process and the granting of the get. It is conducted under the Spouses (Property Relations) Law, 1973, which as a general rule provides that the joint property of both spouses is divided equally between them (half and half), unless the court orders otherwise at the request of one of the spouses in a claim for the division of property.

Who does the resource balancing arrangement apply to? 

The resource balancing arrangement applies only to couples who married after January 1, 1974, and who made no other agreement between them about the division of their joint property, such as a property relations agreement or a divorce agreement.

For couples who married before January 1, 1974, and for common-law couples, the joint property is divided under the community property presumption, a rule developed in the case law. 

When can the resource balancing procedure be carried out? 

As noted, the balancing of resources is in principle carried out during the divorce process itself. There are, however, certain cases in which the court is authorized, at the request of one of the parties, to order the balancing arrangement to be carried out early, before the divorce and the granting of the get (Section 5A of the Spouses (Property Relations) Law). 

These are the cases: 

  1. There is a fundamental rift between the parties.
  1. The couple has been living separately for at least 9 months.
  1. At least one year has passed since the date on which one of the following proceedings was opened:
    1. A proceeding meant to end the marriage, such as a divorce proceeding, a marriage annulment proceeding, and the like. 
    2. A proceeding that concerns the spouses’ property, such as a request to balance resources, a claim for the division of property, an application for dissolution of joint ownership, a request for a declaration of rights in property, and the like.

In certain circumstances, such as domestic violence, the court may order these periods shortened. 

Which assets fall under the resource balancing arrangement and which do not? 

Assets to which the resource balancing arrangement applies

The balancing of resources applies only to certain assets, defined as “joint property” for the purpose of this arrangement, and only those assets are divided equally between the spouses.  

Joint property covers all the assets the spouses accumulated during the marriage, including assets registered in the name of only one of them (!) during that period, among them real estate, savings, securities, vehicles, and more, and even future rights such as severance pay, pension payments or provident fund contributions, further education funds, and so on. 

Assets to which the resource balancing arrangement does not apply

Assets that fall outside the definition of joint property are known as “non-balanceable assets“. The balancing of resources does not reach them; they are not divided between the spouses and remain the exclusive property of the spouse who holds them. 

Non-balanceable assets come in three types: 

(1) “External assets“. These are assets each spouse accumulated before the marriage, along with assets received as a gift or inheritance during the marriage, unless the other spouse proves an intention to share them, that is, that the owner behaved in a way that shows an intention to share ownership. 

A classic and common example of an external asset for which an intention to share is claimed is an apartment one spouse purchased before the marriage, often with financing from his parents, so that it was registered in his name alone, and in which both spouses lived together after the wedding. 

To be clear, the marriage by itself does not establish an intention to share. The intention must be proven through “something more” beyond the marriage itself: for example, where the other spouse invested his own money in renovating the apartment in an amount that significantly raised its value, or where the registered owner rented the apartment out at some point after the wedding but deposited the rent into the couple’s joint bank account, and so on. 

(2) Social Security (National Insurance) benefits paid to one of the spouses.

(3) Benefits or compensation for bodily injury or death paid to one of the spouses. 

How are resources balanced in practice?

The purpose of the balancing process is to even out the financial value of the assets divided between the spouses.

That calls for a series of steps, as follows: 

  1. First, estimate the financial value of the assets the arrangement applies to, meaning every asset that falls within the definition of “joint property”. 
  1. Next, estimate the value of the debts the spouses accumulated together during the marriage to finance the family’s needs, to the extent there are any. 
  1. Then deduct the total debts from the total assets. If a balance remains, it is divided equally between the spouses. Where one spouse holds more assets than the other, he must make balancing payments: he transfers half of the difference in money or in kind, meaning he can pay the other spouse a sum of money or transfer one of his assets of equal value. 

At the end of the balancing process, the couple’s assets must end up divided equally between them, whether by dividing the assets themselves or through balancing payments. 

For example: suppose one spouse bought an apartment during the marriage and registered it in his name alone. The court ruled that the apartment is joint property of both spouses and valued it at 3 million NIS. In such a case, the court will usually prefer not to order the transfer of half the rights in the apartment into the other spouse’s name, which would make the spouses co-owners. Instead, it will order the first spouse to pay the other spouse his share of its value, that is, 1.5 million NIS, or transfer property worth the same amount. 

When can joint property be divided other than by a balance of resources?

As noted above, the resource balancing arrangement applies only to spouses who married after January 1, 1974, and who made no other agreement about the division of their joint property, such as a property relations agreement or a divorce agreement, and provided the court has not ordered otherwise at the request of one of the spouses in a claim for the division of property. 

It follows that to divide the joint property other than by a balance of resources, that is, unequally, one must proceed as follows: 

  1. If there is agreement between the spouses on an unequal division of the joint property, it must be anchored in writing, explicitly, in a property relations agreement (before or during the marriage) or in a divorce agreement (at the end of the marriage), and it must receive legal approval to take effect.
  1. If there is no agreement between the spouses on an unequal division, the spouse seeking it must apply to the court within a claim for the division of property and prove special circumstances that justify it. For example, where the other spouse acted improperly toward the applicant (say, smuggled assets away, or hid and concealed assets he purchased or received, or abused the applicant and behaved violently), or where the other spouse earns far more than the applicant, and so on.