Relationship and money go hand-in-hand

Legal problems relating to debts between spouses

It’s well known that money is one of the most common subjects for couples to argue about. When we talk about money in relationships of any kind, we’re bound to find some frustration and tension.

Executors and lawyers often have to deal with the issue of debts between spouses as part of the separation of property, where each spouse, in principle, keeps his or her own property and is responsible for his or her own debts. Having a prenuptial agreement that excludes assets and debts will result in a separation of property upon death or divorce. However, it is quite common that spouses help each other out financially and invest in, for example, a summer house that is excluded from the marital property regime. Being left with a loan and no cottage will stir up the discussions if the relationship breaks down.

The limitation of debts between spouses in Finland is governed by the Act on the Statute of Limitations on Debt (the Limitation Act). There are no general provisions on the limitation of debts between spouses in the Marriage Act or in the Act on the Dissolution of the Household of Cohabiting Partners.

The limitation rules on compensation in the Cohabitation Act somewhat clarify the legal situation, but the Marriage Act does not contain a clear provision that supersedes the Limitation Act. In the absence of specific rules, the provisions of the Limitation Act also apply on matters concerning spouses and cohabiting partners.

Unfortunately, the Limitation Act is ill-suited when it comes to assessing debts in these types of relationships, as it appears that the long-term and informal debt relationships that occur have not been the subject of close scrutiny by the legislator when drafting the Limitation Act.

However, lawyers have some means at their disposal when it comes to the separation of assets in relation to loans that are not intended for gratuitous benefit of the other spouse, but which are time-barred or subject to interpretation under the law of obligations. Such means may include, for example, an adjustment of a marriage settlement, a claim for compensation under the Cohabitation Act, or claims for change of ownership of property or restitution of an unjust enrichment.

If you have made the decision to keep your money separate, make sure you draft the papers to match this decision to avoid unnecessary disputes. Consult your family lawyer about the options that may be applicable in your situation.