ISRAEL Law and Practice Contributed by: Yaron Mehulal, Nataly Davidai and Shalom Hershkovitz, FISCHER (FBC & Co.)
with the deceased in the deceased’s property, the spouse also receives the entirety of the deceased’s share in that property. • If the deceased had no children nor a spouse, the deceased’s parents and siblings share the entire estate. • If there are no children, grandchildren, parents, siblings or grandparents but there is a spouse, the spouse inherits 100% of the estate. • If there are no children, grandchildren, parents or siblings and no spouse, the estate is divided equally between the deceased’s grandparents and their offspring. • If a deceased’s child is not alive, said child’s share of the estate is divided equally between the deceased’s grandchildren from said child. • If an heir stated above is not alive, their share of the estate passes on to their legal heirs as per the above. 2.4 Marital Property Under Israeli legislation, each spouse is free to trans - fer, during their life and upon death, without restric - tion, all their property, which includes any and all prenuptial property, any and all postnuptial property inherited or received as a gift by said spouse, as well as their part of the marital property acquired together with the spouse during the marriage. Nevertheless, if there is an evident contribution by one spouse to the other spouse’s property, the courts tend to regard the assets as joint property, as if it had been acquired together and owned jointly with the spouse during marriage. For example, a wife can claim 50% of her husband’s prenuptial apartment if she can prove that she contributed to the purchase of the apartment by having paid a certain percentage of a loan taken to finance the purchase of the apartment, and/or by having paid for the apartment’s renovation or main - tenance. Thus, to ensure the protection of assets in wealthy Israeli families, it is quite common for couples getting married to enter into prenuptial agreements, although sometimes these agreements are entered into post - nuptially; the Israeli Property Relations Between Spouses Law, 5733-1973 recognises the validity and
enforceability of such agreements, as long as certain procedural requirements are adhered to. The Property Relations Between Spouses Law This law regulates the two different cases of property status of spouses: those having a property agreement (either prenuptial or postnuptial) and those who do not. For spouses who do not enter into an agreement, the principle adopted by the law is that of “property equalisation”. In essence, this principle means that although the mere existence of marriage does not alter the status of ownership of properties and the obligations of each spouse, upon termination of the marriage, whether due to death of one of the spouses or separation, each spouse becomes entitled to 50% of the value of the spouses’ entire property (includ - ing future pension rights, retirement compensation, study funds, pension funds and other savings), with the exception of: • properties owned by a spouse prior to the mar - riage; • properties gifted to or inherited by a spouse during the marriage; and • payments paid to a spouse by the Israeli National Insurance Agency or in accordance with any law relating to compensation for corporal damage or death. As long as the marriage has not terminated due to the death of one of the spouses or separation, a spouse’s right to property equalisation cannot be transferred, mortgaged or foreclosed. For spouses who do enter into a property agreement, the law allows freedom of contract, meaning such agreement can be drawn up before or during the mar - riage. However, in order for such an agreement to be valid and enforceable, the agreement (and any change thereto) ought to be approved by the competent court, after the court has been convinced that both spouses entered into the agreement of their own free will and that they understood its meaning and implications. In the case of a prenuptial agreement, a notary may replace the court, if the spouses so wish and provided they are scheduled to get married in the near future.
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