Israel’s Property Relations Law - The Complete Guide

What Is the Property Relations Law?

The Property Relations Between Spouses Law, 5733-1973, is the central law governing financial relations between spouses in Israel. The law applies to every couple married from 1974 onward, and to common-law partners based on case law.

The Core Principle: Asset Equalization

Section 5 of the law sets the default: upon dissolution of marriage (divorce or death), each spouse is entitled to half of the other's assets accumulated during the marriage. This is called "asset equalization" (izun mashabim).

What's included in equalization?

• Apartments and real estate
• Savings, deposits, and investment portfolios
• Pension rights and social benefits (details on pension in prenups)
• Vehicles, household contents
• Business or professional goodwill
• Debts and liabilities

What's Not Included in Equalization?

Section 5(a) excludes three types of assets:

1. Assets acquired before marriage - but in practice, Supreme Court rulings have shown that under certain circumstances (such as years of shared management), even such assets may be considered joint property
2. Inheritances and gifts - though here too there are significant caveats
3. Benefits or compensation from a public body for personal injury

The Problem: "Default" Doesn't Fit Everyone

The law offers one model - equal division. But married life isn't always equal:

• One side brought an apartment they owned before marriage
• One side received a significant inheritance
• One side built a business from scratch
• One side's parents funded most of the apartment

In all these cases, automatic equal division may be unfair. A prenup allows you to create a customized model.

Section 2: Freedom of Agreement

The most important section for our purposes. Section 2 states that spouses may enter into a prenup and establish any property arrangement they wish - including full departure from the default. The only condition: the agreement must be certified by a notary (before marriage) or court (after marriage).

Possible Models

Full Sharing (The Default)

All assets are shared, divided equally. Simple, but not always fair.

Full Separation

Property separation - each spouse keeps their own assets. Suitable for couples with significant asset gaps, or when there's a second apartment requiring tax optimization.

Hybrid Model

The most common: some assets are shared (family home, joint savings) while others remain private (inheritances, business, pre-marital assets).

Landmark Rulings

Case 5620/24 - Specific Sharing

The landmark ruling applied "specific sharing" to a pre-marital asset in a case involving decades of shared management behavior. While the ruling was fact-specific, it reinforced the importance of a prenup to clearly define asset ownership from the start.

Section 8 - Judicial Discretion

Section 8 grants the court discretion to deviate from equal equalization "if the court finds that the circumstances justify it." This section has been used in rulings, though sparingly.

Common-Law Partners

The law formally applies to married couples. But in case law, courts have applied similar principles to common-law partners (particularly the older "presumption of sharing"). A prenup for common-law couples is an important step in organizing financial relations.

Frequently Asked Questions

When can you request asset equalization?

Only upon dissolution of marriage - divorce or death. You cannot demand equalization during the marriage.

Can you waive equalization in advance?

Yes, in a certified prenup. That's exactly what a prenup does.

What about debts?

Debts are also part of asset equalization. A prenup can protect against a spouse's debts.

What about child support?

The Property Relations Law doesn't govern child support - that's determined separately under the Maintenance Law and based on the child's best interest.

The Bottom Line

The Property Relations Law sets the "default" - but you don't have to accept it. A prenup allows you to create a customized arrangement that reflects your specific reality: your assets, your intentions, and your life.

Build the agreement that fits you →