Exceptions in the Division of Spouses' Joint Property

My decision to write this article was not prompted by a specific case, but by a reality that, to this day, remains a controversial issue for me personally, and the proper resolution of which requires both legislative and legal changes. The issue concerns Article 1161 of the Civil Code, which defines properties that are not subject to the joint property regime after the registration of the spouses' marriage. These are:
Property that belonged to each of them prior to the marriage;
Property received during the marriage by inheritance or gift; 

The necessity of registration itself and the State's imposition of this obligation upon its citizens—that the emergence of rights and obligations for spouses derives from the registration of marriage—is a subject of separate discussion. I believe that in such a case, the State exceeds its positive role, despite the fact that the court sometimes follows the same line. According to the case law of the European Court of Human Rights: "Marriage has moved beyond formal relationships; the issue of the existence or non-existence of family life depends significantly on the fact of the actual existence of a close personal relationship" (Kroon v. the Netherlands). In its 1994 judgment, the Court explained that "the notion of family life is not confined solely to marriage-based relationships and may encompass other de facto 'family ties' where parties are living together outside marriage." Obviously, this refers to living together without the fact of marriage registration, which was the case in question, especially taking into consideration the circumstance that the obstacle to marriage registration at that time was F.G.'s age. (Decision of the Supreme Court of March 16, 2016, on case No. as-7-7-2016). The outline of the issue itself is also interesting: "The de facto marriage of the parties took place in January 2005, and the registration of the marriage according to the established rule could not be carried out solely on the ground that the precondition provided by the law—marriage age—was not met (Article 1108 of the CC). Moreover, it must be considered that as soon as the law allowed such a possibility (the plaintiff turned 16), the couple registered the marriage according to the rule established by law";

Article 1161 of the Civil Code somewhat declares/makes an exception from the general principle that is also reinforced by the Civil Code. Specifically, Article 1158 of the Civil Code recognizes property acquired during marriage as the joint property of the spouses (an exception is an agreement to keep it in individual ownership in the case of a marriage contract). That is, all property (property implies both real estate and movable property, for example, the right to a claim) is common, which the spouses acquire/receive in ownership during the marriage. The attitude of the legislation itself regarding Article 1161 is as follows: it divides the property of spouses into two parts:
Individual property: Articles 1161 and 1162 of the Civil Code (the latter strictly applies to individualized items, excluding jewelry);
Joint property: Article 1158 of the Civil Code (this article also has an additional protective mechanism for a spouse who was engaged in household activities, cared for children, or due to other valid reasons did not have an independent income—they are still considered a co-owner of the property);

While Article 1158 of the Civil Code is completely understandable and ensures legally sound equality of spouses, in the case of Article 1161 of the Civil Code, the issue changes in such a way that its scope narrows the claim of one spouse against the other due to the following circumstances (there is one exception here in Article 1163 of the same code, namely: any item will also be considered individual property if it is established that as a result of expenses incurred during the marriage, the value of this property has significantly increased compared to its previous value):
1) The joint property regime does not apply to property that belonged to each of them prior to the marriage.
First of all, it is easy to explain that the "property" acquired by a spouse prior to the marriage remains their "individual property." The legislator links marriage to the fact of marriage registration. That is, in the legislator's understanding, an item cannot be considered joint property when spouses live together for years, have a common child/children, but the fact of marriage registration (the so-called signing) has not occurred. Returning to the issue of the State: the State indicates that individuals, i.e., citizens of the State, have the right to live together, have common children, and run a joint household. But if this is not known to it through registration, then the State, by legislative provision, removes the basis of a possible claim of one spouse against the other. In such a case, it no longer matters whether the price of the said property increased or what expenses one spouse incurred on the other spouse's property, etc. (In the case of such circumstances, the demanding spouse may have the right to claim based on unjust enrichment, but that is a separate issue). This means that if I am not in a "registered" or, as we call it, "official marriage" with a spouse, then I presumably bear the risk that the right to claim against the other spouse may not even arise. For me as a lawyer, the second part of Article 1161 is particularly interesting, which, even in the case of a registered marriage, leaves certain items in individual ownership and does not apply the joint property regime to them;
2) The joint property regime does not apply to property received during the marriage by inheritance or gift.
This article is further divided into two parts. But before we delve into them, we must first explain the role of the State when it interferes in private relations. First of all, we must agree that the State was not created/invented by society so that it constantly takes care of its citizens; but if it decides that it must take care of any person in any legal relationship, then it has a positive obligation that the protection of one party does not result in the sacrifice of the rights of the other party. In other words, the State must treat each citizen equally and not allow any group or person to be given more rights (especially in private legal relations) than they need. The indication of this is interesting and/or necessary also because the existence of the law, or a state governed by the rule of law, does not only mean legality; it must also be governed on the basis of justice. We resort to this explanation because, on the one hand: Article 30 of the Constitution of Georgia points to the equality of rights of spouses (Marriage, as a union of a woman and a man for the purpose of founding a family, is based on the equality of rights and the free will of the spouses). But on the other hand, this equality of rights, equality before the law, is limited by two parts: inheritance and/or gift;

Inheritance: A spouse who is in a registered marriage does not acquire the right of joint ownership over the property of the other spouse if the latter received this property by inheritance. To explain it more simply, suppose the persons are spouses in a registered marriage for several decades, but the law precludes the emergence of the right of ownership/joint ownership of one spouse over the property/ownership of the other spouse. According to one interpretation, this is necessary because inheritance is a more "personal" right and it accompanies the person (in the present case, the inheriting spouse) from birth; and accordingly, since they possess it from birth, the right derived from this personal right is their property, into which the spouses (presumably the other spouse) have put no labor to give rise to a right of claim (labor, of course, implies joint family activities);

However, this provision also limits any kind of exception in case of a dispute. Especially if there is a de facto accepted inheritance and/or acceptance of inheritance is presumed, the second spouse will not be able to extend joint ownership to it if they do not take care of this property, do not improve it, etc. Despite the multifaceted nature of this issue, the question of whether spouses are equal if one spouse receives an inheritance remains open. That is, the constitutional provision of "equality," which is primarily tied to the issue of the existence of the right, is open, and "despite" the constitutional right, equality is still not guaranteed by the legislative provision. Equality is not an abstract issue; it is a part of "living" law, which means granting the same right at the legislative level to persons in the same situation, which in the present case is restricted by "law." It is also extremely important that inheritance is a right of claim arising from a statutory basis (I will not touch upon the purpose of a will or its relation to this at this stage);

Gift (Donation): The biggest question mark that establishes a "legal barrier" in the joint property of spouses is the contract of gift. The contract of gift, in its turn, is an interesting issue because if the spouses are in a registered marriage and if one of the spouses receives any property based on a contract of gift, then the other spouse does not acquire a right of joint ownership over it. Here too, presumably, the legislator's provision must be driven by personal nature (albeit from a contractual personal nature), because a gift does not mean only a legal relationship; it also possesses a characteristic feature of relations left outside the legal framework—a "personal relationship." However, despite such a provision, excluding property received on the basis of this contract from joint ownership entails several risks that are constantly present. These are:
One of the spouses may use this to their advantage, specifically by taking back their property with the received funds, but based on a contract of gift;
A person intending to divorce may not register real estate/movable property in their own name and may receive it through a third party via a contract of gift;
One spouse may use this as a means of defense against the other spouse;
(Whether such manipulations are morally justified and/or unjustified is another matter);

Since the contract of gift is a private legal transaction, it is, of course, subject to evaluation under the principle of good faith. Also, if the indicated conditions exist, it is subject to the question of whether it is a sham transaction, etc. However, in any case, the existence of the issue in this form still shifts the burden of proof. Specifically, procedurally, the burden of proving this and the obligation to present corresponding evidence falls on the party referring to it—that is, the spouse—and mostly unilaterally;

Not including property received on the basis of an inheritance and/or a contract of gift in joint ownership generates a risk that is primarily directed at the spouses themselves. Namely: although the principle of equality is not absolute, at the level of rights, it points to a special equality of spouses towards each other, which applies to the most important period—marriage. Accordingly, if equality is expressed in obligations towards each other, it must also be equality in the right to claim against each other. Otherwise, the "economically" capable party has the right to use legal "moves" to prepare future economic grounds that will infringe upon the other, and in the best case, "drag" the spouses into a multi-year dispute;

Viewing the issue in such a way that what is written in the law must be and is built on the basis of justice does not mean that it should only be interpreted in isolation. I recall a case where, despite the existence of joint property of the spouses—specifically, a partnership share in a company was acquired during the marriage—the Supreme Court of Georgia pointed out that: "Not only the peculiarities of determining the rights and obligations of the spouses must be taken into account, but also the rights and obligations of the partners, which they hold by law and the charter together with one of the spouses. The settlement of a dispute between spouses must not ignore the rights of other persons, which they possess on the basis of the Law 'On Entrepreneurs' and the charter. Consequently, the Cassation Chamber takes into account the established fact that R.K.'s share in the enterprise represents the joint property of the spouses, but when dividing this share, the court must, according to the aforementioned interpretations, take into account the restrictions that may apply to the admission of a new partner into the enterprise" (see SCG No. as-97-93-2012, 28.06.2012);

Because "the legislator should not create an illusion that whatever they say will be the only law. We will not be mistaken if we say that the legislator does not create law, but invents the form of its existence" (Besarion Zoidze, Tbilisi, 2007, Constitutional Control and the Order of Values in Georgia, p. 110);