Separate property on divorce: what is not divided between spouses?

One of the most common questions when a marriage is dissolved is whether all of the spouses’ property must be divided. The short answer is: no.

On divorce, the statutory community property regime comes to an end, but the separate property of each spouse remains, as a rule, that spouse’s own. This distinction is not always obvious. Circumstances such as the time of acquisition, the origin of the funds invested and the matrimonial property regime chosen may change the legal outcome.

Is everything acquired during the marriage joint property?

Not necessarily.

Where the statutory community property regime applies, ownership and other rights in property acquired during the marriage through the spouses’ joint contribution belong to both of them. It is not decisive in whose name the deed was executed before a notary or who is named as the owner in the relevant document.

Joint contribution may consist not only in investing money but also in:

• contributing labour;
• caring for the children;
• doing the housework;
• supporting the other spouse’s professional development.

The law presumes that such a contribution exists. Consequently, the spouse who claims otherwise must prove it. These rules are set out in Article 21 of the Bulgarian Family Code.

Before proceeding to a division, however, it should be verified which matrimonial property regime applied – statutory community of property, statutory separation of property or a regime set out in a marriage contract.

Which property remains separate on divorce?

The main categories of separate property are governed by Articles 22 and 23 of the Family Code.

1. Property acquired before the marriage

A property, a car or another item acquired before the civil marriage was entered into remains, as a rule, the separate property of the spouse who acquired it.

Entering into a marriage does not, by itself, turn separate property into joint property. This also applies where both spouses have used the property as the family home.

The fact that the other spouse took part in carrying out repairs or improvements, or in paying off debts, does not automatically make that spouse a co-owner either. Depending on the particular circumstances, however, a monetary claim may arise.

2. Inheritance received during the marriage

Property acquired by inheritance is the separate property of the heir, even though the inheritance was received during the marriage.

If one spouse inherits – for example – a flat, agricultural land or a sum of money, the other spouse does not automatically acquire rights over them. This property is not divided merely because the marriage has subsequently been dissolved.

The legal outcome may be different if the inherited property is sold, the proceeds are mixed with joint funds and a new asset is acquired with them. In that case, the origin of the money should be examined, as well as whether transformation of separate property can be proved.

3. A gift made to one spouse

A gift also remains separate property where it is made solely in favour of one spouse.

Particular care is required in the case of gifts from parents. It is not enough to claim later that the parents gave the money only to their own child. In the event of a dispute, it must be possible to establish:

• who the donor is;
• who the recipient is;
• what sum or item was given;
• when the gift was made;
• how the gift has been used.

Where the gift was made to both spouses, it cannot be treated as the exclusive property of only one of them.

4. Items for ordinary personal use

Movable items intended for the ordinary personal use of one spouse are that spouse’s separate property. These may include clothing, personal belongings and other items which, given their purpose, are used only by that spouse.

The assessment depends not only on the type of item but also on the way in which it has actually been used.

5. Items for practising a profession or craft

Movable items which serve one spouse in practising that spouse’s profession or craft are also separate property. These may be specialised tools, medical equipment, professional equipment or a work computer.

This rule does not mean that the other spouse’s economic contribution is always irrelevant. If the property is of considerable value and the other spouse contributed to its acquisition, that spouse may, subject to certain conditions, claim part of its value under Article 30 of the Family Code.

6. Property of a sole trader

Rights in rem acquired by a spouse who is a sole trader may be that spouse’s separate property where they are intended for the commercial activity and are included in the sole trader’s enterprise.

Not all property formally connected with a business automatically falls into this category. It is necessary to examine the intended purpose of the asset, the source of the funds and its inclusion in the commercial enterprise.

Can an asset bought during marriage remain separate property if it was purchased with separate funds?

An asset acquired during marriage may remain wholly or partly separate property if it is purchased using one spouse’s separate assets or funds. Bulgarian law refers to this as transformation of separate property.

For example, a spouse sells a flat which that spouse owned before the marriage and uses the proceeds to buy a new property. Although the new property was acquired during the marriage, it may remain separate property if it is proved that the price was paid entirely with separate funds.

Where only part of the price was paid with separate property, a corresponding proportion of the acquired asset may qualify as separate property. In that case, the corresponding part of what was acquired belongs to that spouse personally, unless the separate portion invested is insignificant.

Is it enough that the money was in a personal bank account?

No.

This is particularly important following the delivery of Interpretative Decision No. 2 of 20 January 2025 of the Supreme Court of Cassation.

Where real property is purchased during the marriage with funds from one spouse’s bank account, the mere fact of being the account holder does not prove that the property is separate. That spouse must establish the separate origin of the funds used and the link between those funds and the specific purchase.

For example, it must be proved that the money originates from:

• the sale of property owned before the marriage;
• an inheritance;
• a gift made personally to the spouse concerned;
• another source of separate property recognised by law.

Income from employment, professional practice or business activities does not become separate property merely because it is paid into an account opened in the name of one spouse.

How is it proved that property is separate?

The possible evidence depends on the specific case. The following are the most commonly used:

• notarial deeds and contracts;
• certificates of heirs;
• wills;
• deeds of gift;
• bank statements;
• payment orders;
• documents relating to the sale of previous separate property;
• tax and accounting documents;
• witness testimony, where admissible;
• court expert reports.

In cases of transformation of separate property, it is particularly important to be able to trace the movement of the funds. The more time has passed and the more transfers and withdrawals have been made, the more difficult it may be to prove.

Does it matter in whose name the property was acquired?

The name in the notarial deed is important, but not always decisive.

If the property was acquired during the marriage under statutory community of property and with joint contribution, it may be joint property even if the notarial deed is only in the name of one spouse.

Conversely, the property may have been acquired during the marriage but turn out to be wholly or partly separate if it was purchased with property proved to be separate.

The answer therefore does not follow from the notarial deed alone. It is necessary to examine the time of acquisition, the origin of the funds and the matrimonial property regime applicable between the spouses.

Is separate property divided on divorce?

Separate property does not become subject to division merely because the marriage has been dissolved. In the event of a dispute, however, the court may need to establish whether a particular asset is in fact separate or forms part of the terminated matrimonial community of property.

It is also possible for one spouse to be entitled to part of the value of certain separate property of the other, if the special requirements laid down by law are met. This is a monetary claim and does not necessarily mean acquiring ownership of the item itself.

Why is a preliminary legal assessment important?

Property disputes between spouses are rarely decided solely by reference to the name in which ownership is registered. Bank transactions from years earlier, gifts from relatives, previous sales, loans, improvements made and the actual contribution of each spouse may be relevant.

Before court proceedings are commenced, it is necessary to establish:

• the applicable matrimonial property regime;
• the time and legal basis of acquisition;
• the origin of the funds invested;
• the available evidence;
• possible counterclaims.

A timely consultation with a family lawyer may prevent an incorrect division or the loss of the opportunity to prove the property’s status as separate property.