Why is the timing of property division important in divorce proceedings?

It is very important to set the standard time for property division during divorce. This is because the property held by each person at that reference point soon becomes the subject of division (property subject to division).

The court states that ① "In principle, the property subject to division and its amount are determined based on the closing date of the factual hearing of the divorce suit," and ② "If it is easy to spend or conceal, such as money, and there is a risk of double addition when the reference point is different, the object and amount of division are determined based on the time of breakdown of the marital relationship."

The easy way to solve ① is as follows. First, the 'factual trial' refers to the first and second trials in Korea's three-trial system. The first and second trials determine the facts based on the arguments of both sides and the evidence submitted, confirm that certain 'facts' that are the subject of legal judgment exist, and then make legal judgments accordingly. In other words, it is called ‘factual judgment’ because it can judge ‘facts’.

On the other hand, the Supreme Court, the third trial, judges only the ‘law’ without touching the ‘facts’ established in the ‘factual trial’. It only involves one more legal review of the ‘factual trial’ decision. Therefore, the third trial is also called the ‘legal trial’.

In other words, if the divorce suit has progressed to the second trial, the last argument date (argument closing date) of the second trial can be used as the standard time for property division, and if it has ended in the first trial, the last argument date of the first trial can be used as the standard time for property division.

Let’s solve ② easily as well. ‘The point of breakdown of the marital relationship’ literally means the point at which the marital relationship between the couple is broken to the point where it can no longer be restored. This will vary depending on each case, but it is generally considered the time of breakdown when one party files a divorce suit. The beginning of separation is sometimes seen as the point of breakdown.

In the case of money that is easy to spend or hide, typically financial assets such as bank deposits, the time when a divorce suit is filed (when the complaint is filed with the court) can be considered the standard time for property division.

Let me give you a specific example. Let’s assume that A owned an apartment worth 1 billion won at the time she filed for divorce. Assuming that the market price of this apartment has reached 1.5 billion won by the end of the trial hearing, what is the value of this apartment in terms of property division?

The answer is 1.5 billion won. This is because, in principle, the object of property division and its amount are determined based on the closing date of the factual trial argument.

So, what would happen if A sold the above apartment for 1.2 billion won in the middle of the lawsuit? As of the closing date of the trial trial, A is not the owner of the apartment, so the above apartment cannot be regarded as property subject to division. However, in this case, it can be said that A holds property subject to division worth 1.2 billion won, which is equivalent to the sale price of the apartment.

Next, at the time the divorce suit was filed, A had a bank deposit of 1 billion won, and this deposit amount increased to 1.5 billion won by the end of the factual hearing. So, how much of the deposit is subject to division?

The answer is 1 billion won. This is because the standard time for division of financial assets is generally considered to be the time a divorce suit is filed.

In this way, the process of considering whether various individual assets such as real estate, automobiles, deposits, insurance, stocks, etc. should be included or excluded from division and what their value should be, depending on the reference point, is the core of property division.
 

Small Business Team

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