How to Split Assets During Divorce or Separation in Norway?

Separation or divorce — SEPARASJON OG SKILSMISSE is not only an emotionally challenging time but can also have a significant financial impact. Managing finances during this transition can feel overwhelming. To help you navigate the financial aspects of divorce, we have compiled several useful guidelines how to split assets in Norway.

Understanding the Division of Assets in a Divorce

In Norway, the division of assets in the event of a divorce must comply with — THE MARRIAGE ACT (LOV-1991-07-04-47), as well as any prenuptial agreements or wills that have been established. It is advisable to prepare financially for a potential divorce before it happens. For instance, maintaining personal savings can provide financial security and cover expenses post-divorce.

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According to Central Bureau of Statistics Norway — STATISTISK SENTRALBYRÅ (SSB), most divorces in recent years have involved individuals between the ages of 20 and 50. This is a life stage where many people have children and significant financial commitments, such as mortgages. Therefore, it is crucial to cooperate in order to ensure a smooth financial transition for both parties. If you have children under the age of 16, participation in mediation is mandatory to establish a co-parenting agreement, covering aspects such as custody, residence, visitation, and financial support.

Transitioning from Joint to Individual Finances

How you manage your joint finances before divorce will significantly affect your financial stability afterward. If financial contributions between spouses are unequal, divorce can create financial hardship. In the worst cases, financial dependence can become a barrier to leaving an unhealthy relationship.

For instance, if one partner has taken on more childcare responsibilities, worked part-time, or taken extended parental leave, the other partner should compensate for the loss of income. Establishing financial equality during the marriage ensures security for both partners. Avoiding financial crises allows for a smoother emotional recovery from the divorce.

Can I Afford a Divorce?

When a divorce becomes a reality, it is important to have a clear picture of your financial situation. This includes gathering information on income, assets, debts, and expenses. Understanding your financial position will help you plan for post-divorce stability.

Legal and Financial Advice for Divorce in Norway

For many individuals, separation or divorce presents financial difficulties. Housing costs per person typically increase, and only one income must now cover all household expenses. To assess your financial preparedness, it is essential to create a household budget. Begin by outlining your current financial situation to identify excessive or unnecessary expenses.

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Next, develop a future budget to estimate how much you can afford in your new life. It may also be beneficial to account for costs related to the divorce, such as moving expenses or purchasing new furniture.

Reviewing Insurance Policies

During a stressful divorce, INSURANCE is often overlooked. It is essential to review all policies to ensure financial security for yourself and your family. Joint insurance policies may need to be separated, and decisions should be made regarding coverage for children. If you and your spouse are beneficiaries on each other’s policies, these designations should be updated. Additionally, if you are moving into a new home, securing home insurance and life insurance from day one is crucial to avoid unexpected financial setbacks.

Updating Contracts and Agreements

Owning a home involves multiple agreements, from ELECTRICITY and waste disposal to BROADBAND and streaming services. Determine who is responsible for which contracts and update them as needed. Cancel any subscriptions that are no longer necessary.

Divorce Settlement and Asset Division in Norway

Following a divorce, a formal settlement agreement must be established. This agreement outlines the division of assets and debts between both parties. While you can draft the agreement independently, it becomes legally binding once signed. Seeking legal assistance can be beneficial to ensure a fair and enforceable agreement.

Debt Allocation in Divorce

As part of the divorce settlement, joint debts must also be addressed. You are not responsible for your spouse’s PERSONAL LOANS, such as student loans. However, if both of you signed a loan agreement, you share the responsibility for repayment. If one spouse took out a loan for the family’s benefit, the obligation to repay should be specified in the divorce settlement.

Taking Over a Mortgage After Divorce in Norway

If you wish to assume full responsibility for the mortgage after a divorce, you must meet specific criteria:

Your spouse must agree to transfer the HOME MORTGAGE to you. If an agreement cannot be reached, the property may need to be sold.

You must renegotiate the loan with your bank. Your individual financial situation must be strong enough to cover mortgage payments and withstand potential interest rate increases of around three percentage points.

The bank will reassess your debt-to-income ratio to determine repayment capability. Using a mortgage calculator can help you estimate the maximum mortgage amount you can afford.

Some banks offer temporary relief during a divorce. Consult your bank to explore available options, as each case is assessed individually.

Keeping the Family Home After Divorce

Many individuals prefer to stay in the family home after divorce. If you and your spouse co-own the property, one party must agree to transfer ownership to the other. Financial compensation is typically required to balance the asset division.

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If you plan to retain ownership of the home, you must ensure that mortgage payments are transferred to your account and update home insurance policies accordingly.

Staying in a Rented Home During Divorce

If you and your spouse live in a rental property, one of you may continue living there after the divorce. The decision depends on various factors, including mutual agreement and the landlord’s approval.

If both parties wish to stay, the person with the greatest need for the property (e.g., the primary caregiver for children) is usually given priority. If one spouse owned the rental property before the relationship, the other spouse may not have the right to remain. However, if children are involved, the primary caregiver may still be granted residence rights in some cases.

Housing Assistance During Divorce

If keeping the family home is not an option, finding new accommodation is necessary. If children are involved, parents often prefer to remain in the same area to minimise disruptions to schooling and social life. If a relocation significantly impacts custody arrangements, approval from the other parent may be required before signing a new lease.

The Cost of Living Alone After Divorce

Managing personal finances after divorce can be challenging. When previously shared expenses must now be handled individually, covering everything from rent to insurance can become overwhelming.

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Establishing a new home can be especially difficult for the financially disadvantaged spouse. Single parents, in particular, may struggle to secure sufficient funds to purchase a home. In such cases, obtaining financial assistance from a family member can improve mortgage approval chances by combining financial resources.

Professional Legal and Financial Advice in Norway

LAWYERS and WEALTH MANAGEMENT EXPERTS collaborating with localmarket.no can provide assistance in all aspects of divorce in Norway. Contact us if you have any questions regarding debt, splitting of assets, or housing arrangements during a separation.