GERMANY Trends and Developments Contributed by: Valentin Todorow, Benedikt Xylander and Franziska Kästle, Raue
Recovery of gifted real estate in non-marital cohabitation and by parents-in-law after separation Financial claims between spouses, including real estate gifted from one spouse to the other, are gov ‑ erned by asset compensation law. However, no such law exists for real estate gifted in non-marital cohabi ‑ tation and by parents-in-law to one of the spouses. Therefore, the recovery of such gifts is constantly being developed by case law. There is a growing trend by the courts in recent years to allow for real estate gifted in non-marital cohabita ‑ tion or by parents-in-law to be recovered after sepa ‑ ration. According to this case law, the basis for such gifts is regularly the continuation of the partnership, and this basis for the gift may cease when the part ‑ ners separate. However whether that basis may have already been fulfilled always depends on the individual case. If the partners spilt months after the real estate was gifted, the courts will be more inclined to accept that the gift has not yet been able to serve its purpose in the continued partnership, compared to a separa ‑ tion years after the real estate was gifted. As a precaution, it is advisable to include a clause regarding a possible separation of the partners in the In German divorce law, the equalisation of pension rights continues to play an important role in the finan ‑ cial settlement of divorces. • Foreign pension rights: in the past, foreign pension rights were often taken into account only superfi ‑ cially in divorce decisions. This is because, unlike German pension rights, foreign pension rights are not part of the German court’s divorce decision but are left to be settled at a later date. However, recent high court decisions have highlighted the importance of fully assessing these rights during divorce proceedings to ensure that appropriate fairness adjustments can be made in the equali ‑ sation of the German rights and to facilitate the negotiation of settlements. • Validity of prenuptial agreements/Islamic Mahr: higher courts have also focused on how Islamic donation agreement. Pension equalisation
Mahr (dower or morning gift) in marriage contracts interacts with the German equalisation of pension rights allowing amendments of the contract and a reduction of the agreed Mahr in the divorce pro ‑ ceedings. As the equalisation of pension rights is an important financial consequence of a divorce under German law, failing to take this into account can result in a substantial alteration of the financial basis of the marriage contract, which justifies an alteration of the contract according to the higher courts. Gift tax on prenuptial agreements A recent Federal Financial Court ruling confirmed the tax liability of lump-sum settlements in prenuptial contracts. The court ruled that property received at the start of a marriage in exchange for waiving post- marital claims, such as accrued gains and spousal support, is subject to gift tax. The waiver of potential future claims in case of divorce does not qualify as sufficient consideration to offset the recipient’s gain. This contrasts with a 2021 ruling according to which lump-sum payments made upon divorce, rather than immediately after marriage, could be considered not to be subject to gift tax, depending on how they were worded, provided they were tied to the dissolution of the marriage and part of a comprehensive settlement. Child and Maintenance Law Parenting, living and contact arrangements In the realm of parenting and care models, we con ‑ tinue to observe a notable trend towards shared/ equal parenting arrangements post-separation. Pre ‑ viously reserved for low-conflict situations, courts are now more frequently granting equal division of care. However, decisions are still being made on a case- by-case basis. The previous government’s plans to make shared parenting the legal default, have not been taken up again after the government change in 2025. Child and spousal maintenance Recent court decisions indicate a shift in handling child maintenance claims, considering the extent of (physical) childcare responsibilities by the mainte ‑ nance-paying parent. This trend reflects a broader
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