Property Relations Between Spouses in Bulgaria: During Marriage and Upon Divorce

Private Clients Insights, Family and Children

In Bulgaria, spousal property relations are regulated by the Bulgarian Family Code 2009 (‘FC’), which establishes clear legal regimes to define ownership, management, and division of property between spouses during marriage and upon its dissolution. Understanding these regimes is essential for spouses to know their rights and obligations concerning property acquired before and during marriage.

Applicable Law

The below analysis is from the perspective of Bulgarian law. It needs to be considered that, where there is a cross-border element, the main issue that arises first is namely that of the applicable law. Such situations arise, for example, where spouses have different nationalities and/or live abroad.

Bulgaria is one of 18 EU Member States (the others being Austria, Belgium, Croatia, Cyprus, Czechia, Finland, France, Germany, Greece, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Spain, and Sweden) that applies Council Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes (‘Regulation’). As aptly summarised by the European Commission, under the Regulation, spouses can agree which country’s laws will apply to their matrimonial or registered partnership property, either in:

• the country where one or both are ‘habitually resident’;
• the country of nationality of either spouse or partner;
• the country under whose law the registered partnership was created.

Where the couple do not make such a choice, jurisdiction will be decided in the case of matrimonial property based on (taken in order):

• the country where the couple both lived after the marriage ended; or
• the couple’s common nationality when the marriage ended; or
• the country with which the couple had the closest connection at the time the marriage ended.

Per Articles 21–22 of the Regulation, the law designated must not necessarily be the law of a Member State, i.e. a non-EU law may also be applicable, provided that it meets the above criteria. Importantly, the law applies to all assets falling under that regime, regardless of where the assets are located. Thus, for example, the spousal ownership over a real estate in France can be governed by Bulgarian law. 

As implied above, in addition, spouses may elect or change the law that applies to their marriage with an agreement in writing. If concluded in Bulgaria, it must be with notarised signatures and contents. Per Article 22(1) of the Regulation, that law may be:

• the law of the State where the spouses or future spouses, or one of them, is habitually resident at the time the agreement is concluded; or
• the law of a State of nationality of either spouse or future spouse at the time the agreement is concluded.

Unless the spouses agree otherwise, a change of the law applicable to the matrimonial property regime made during the marriage shall have prospective effect only, i.e. it would not apply to property as acquired prior to the change.

Community of Property Regime

Bulgarian law recognises three regimes of property relations between spouses. 

To begin with, the community of property regime, is the default legal regime under the FC and it applies unless the spouses have elected one of the other two regimes, as discussed below. Under the community of property, all rights in rem acquired during the marriage as a result of the joint contribution of both spouses become jointly owned by them, regardless of whose name the property is registered under. Such joint contribution is presumed – but can be rebutted in the proceedings for its division (typically, in divorce) – and it can take the form of provision of financial resources, work, care for children, and household work.

Importantly, the above applies to rights in rem only. Such rights encompass ownership only over tangible assets such as houses, motor vehicles, paintings, etc. Most conspicuously, it does not apply to money, company shares, or bank accounts. Therefore, assets other than rights in rem or any assets (including rights in rem) acquired before the marriage, or during marriage by inheritance or gift, remain personal property of the acquiring spouse. Personal items that serve ordinary personal needs or professional use of one spouse are also considered that spouse’s personal property.

In this regard, it is appropriate to clarify the concept of transformation of personal property. This means that, if property is acquired during marriage entirely through personal property, the so acquired property remains the acquiring spouse’s personal property. For example, if one spouse receives money as donation from his parents during the marriage and then purchases a car, that car will too be his personal, rather than joint, property.

As a general rule, joint spousal property cannot be divided during the marriage and either spouse can manage such property. It can be disposed of only with the consent of both spouses. Joint spousal property can nevertheless be divided during the marriage by the court for ‘important reasons’, e.g. alcoholism, gambling addiction or anything else that puts in jeopardy the family property.

Finally, both spouses are jointly and severally liable for obligations assumed during their marriage for the purpose of meeting family needs. For example, this would apply to the repayment of a loan taken by one spouse for the purchase of the family home.

Separation of Title Regime

Under this regime, spouses maintain full ownership and control of the property purchased during marriage. There is no joint ownership of assets accumulated during marriage; each spouse owns and manages their property independently. This regime can be agreed upon by spouses either before or during marriage through a postnuptial contract (see below).

Still, even where such a regime is elected, upon divorce, each spouse has the right to receive a portion of the value of the rights and assets – all of them, not just the rights in rem – the other has acquired during the marriage, to the extent that he or she has contributed with work, resources, care for children, household work, or in any other way. By contrast to the community of property regime above, such contribution is not presumed but, on the other hand, the list of forms in which it can manifest itself is open-ended and therefore broader.

Importantly, here too both spouses remain jointly and severally liable for obligations assumed during their marriage for the purpose of meeting ongoing family needs. The additional legal requirement that such needs must be ‘ongoing’ appears to imply that, by contrast to the community of property regime, the liability applies to situations of typical day-to-day obligations rather than major ones like the purchase of a family home, which would be only one of the spouse’s individual property anyway.

Contractual Regime

Spouses may enter into a marital (pre- or postnuptial) contract either before or during marriage to establish specific property relations different from the default regimes. In the former case, it applies from the date of the marriage and, in the latter, from the day of its conclusion or another date stipulated in it. The contract must be in writing and with notarised signatures and contents. It can regulate ownership, usage, management, and distribution of property, providing significant flexibility based on the spouses’ wishes. It can be amended or terminated during the marriage; in the latter case one of the regimes above, as elected by the spouses, will henceforth apply.

Notably, a postnuptial contract can also allow for the transfer of property between the spouses during their marriage without leading to a change of the applicable community of property or separation of title regime. For example, one spouse could sell a jointly or individually owned house to the other spouse, who would acquire it as a single owner, and then continue to have their remaining property relations governed by the community of property regime.

Marital contracts may not govern non-property relations such as access to children, etc.

Termination and Division of Property

When a marriage ends either by divorce or death, the joint property is typically converted into joint ownership. The former spouses’ or their heirs’ shares, respectively, would be deemed equal unless the contribution presumption has been fully or partially rebutted, thereby leading to the establishment of a different ratio. A spouse may seek a larger share of the marital assets also if they are allocated a greater share of the exercise of parental rights and responsibilities towards the minor children of the marriage which causes particular difficulties or if their contribution to the joint ownership significantly exceeds the other spouse’s.

Property acquired before marriage or during it as separate property, by virtue of the separation of title regime or a marital contract, remains outside this division. As mentioned above, in a separation of title regime, a contribution by one spouse could be proven, which would nevertheless lead to acquiring a share in the other spouse’s property. This does not apply to the contractual regime, where property relations remain determined entirely by that contract.

Finally, as mentioned above, joint spousal property can be divided during the marriage by the court for ‘important reasons’, also without dissolving the marriage.

Further Questions

New Balkans Law Office regularly advises and represents parties in divorce cases, in particular with cross-border divorces. For further information on divorce, you can check this article of ours. 

If you have any further questions on these matters, please do not hesitate to contact us.