A financial agreement for an apartment before marriage, drawn up by a lawyer, is designed to ensure that when one spouse enters the marriage already owning an apartment, that apartment remains theirs if the couple separates.
When one spouse bought an apartment, or received one as a gift or inheritance, before the marriage, the Property Relations Law says the apartment should remain that spouse’s property. In certain circumstances, however, the court may treat the couple’s family home as joint property, even though it belongs exclusively to one spouse and is registered in that spouse’s name in the land registry.
To avoid those situations, it is essential to have a professional attorney draw up a financial agreement for the apartment before the marriage, stating that even in a divorce, the apartment remains the exclusive property of the spouse who owned it beforehand.
It is best to sign a financial agreement before the wedding, but it is also possible to sign a financial agreement after the wedding.
In this article we will look at the Property Relations Law, at the court ruling that changed the rules of the game, and at why signing a financial agreement for an apartment before marriage matters so much.
Financial agreement for an apartment before marriage – what the Property Relations Law says
Section 5 of the Property Relations Law governs the division of property between married spouses under the resource-balancing arrangement upon divorce, or upon the death of one of the spouses. This is the language of the law:
“Upon the dissolution of the marriage or upon the termination of the marriage due to the death of a spouse, each spouse is entitled to half the value of all the couple’s assets, except for assets they had before the marriage or received as a gift or inheritance during the marriage, and assets whose value the spouses agreed in writing would not be balanced between them.”
From the language of the law we learn that resource balancing does not apply to assets that belonged to one of the spouses before the marriage.
Financial agreement for an apartment before marriage – the ruling that changed the rules
In a case heard by the Supreme Court, the court in Jerusalem took up the question of dividing an apartment that had belonged to one of the spouses before the marriage.
The appeal was brought, through an attorney, by the spouse who owned the apartment, challenging a Tel Aviv District Court ruling that the apartment, although owned by that spouse before the marriage, had to be divided equally between the two spouses upon divorce.
The Supreme Court dismissed the appeal and recognized the other spouse’s right to half the value of the apartment. The court made clear that the Property Relations Law does not prevent spouses from creating co-ownership in specific assets, even when an asset is registered in the name of only one of them. In certain circumstances, the court held, a “specific co-ownership” can arise in the family home, given the special status of the apartment that serves as the roof over the family’s head.
With this ruling the court set a precedent that other courts have since adopted and applied.
It is no accident that the judge added, at the close of the ruling, that the safest legal way to prevent specific co-ownership from arising in a family home is to sign a financial agreement for the apartment before the marriage.
Anyone who owns a residential apartment from before the marriage is therefore well advised to see a lawyer who focuses on financial agreements between married couples and draw up a financial agreement for the apartment before the marriage, to prevent a future situation in which their spouse acquires rights in the apartment they own.
A financial agreement for an apartment before marriage is equally valid for common-law partners.
The bottom line: sign a financial agreement for an apartment before marriage
The Property Relations Law says an apartment owned by one spouse before the marriage stays out of the division of property. The Supreme Court’s ruling on the family home changed those rules in practice, which is why a financial agreement for an apartment before marriage has become such an essential and widely used agreement.
* Updated for 2026
