Divorce and division agreement: step by step

A divorce is rarely easy, neither emotionally nor practically. In the middle of all the difficult parts, you also have to deal with how your joint finances and belongings are to be divided. This is called the division of property (bodeling), and it is one of the most important decisions in the whole divorce process.

This guide takes you step by step through the division of property on divorce in Denmark. You get answers to what a division agreement is, when you need one, and how you can draw it up yourselves, so you avoid unnecessary conflicts and ensure a fair division.

What is the division of property on divorce?

The division of property is the process where spouses divide their assets when the marriage ends. In Denmark, the starting point is that spouses have divisible property (also called community of property or joint property), unless they have made a marriage settlement that provides otherwise.

On a divorce, the divisible property must be settled and divided. This happens either:

• Privately, by you making a division agreement yourselves
• By public administration through the probate court, if you cannot agree

A division agreement is by far the most common solution and gives you full control over the division.

When do you need a division agreement?

You need a division agreement in these situations:

• On divorce, when the marriage is dissolved and the assets are to be divided
• On separation, where many choose to carry out the division already
• On an unequal division, if you agree on a split that differs from 50/50
• With complex financial circumstances such as real property, a business or investments

Even when you agree on the division, it is wise to document the agreement in writing. It protects you both and prevents future disputes.

Overview: the division in 7 steps

Step 1: apply for divorce or separation

The division formally takes its starting point in your application for divorce or separation to the Agency of Family Law. The community of property ends on the ending day, which is the day the Agency receives the request for separation or divorce.

Step 2: fix the cut-off day

The cut-off day is the point at which your assets are settled. It works as a snapshot of your financial situation. What happens after this day (new income, new debt or new purchases) is as a rule kept out of the division.

The cut-off day is normally the day you:

• Submit the application for separation, or
• Submit the application for divorce, if you skip the separation

Step 3: settle the assets

Now you must make a complete statement of everything you own and owe. This includes:

Assets:

• Real property (house, flat, holiday home)
• Bank accounts and savings
• Securities and investments
• Cars and other vehicles
• Valuable contents (art, jewellery, collections)
• Business shares

Debt:

• Mortgages
• Bank and consumer loans
• Overdrafts
• Student debt
• Other debt

The net assets are the total assets minus the total debt. It is this sum that is as a rule divided equally.

Step 4: identify separate property and personal rights

Not everything is included in the division. The following is typically kept out:

• Separate property created by a marriage settlement
• Inheritance and gifts that the giver has directed to be the recipient's separate property
• Reasonable pension schemes, which each spouse as a rule takes out in advance
• Personal compensation and certain insurance payouts
• Personal belongings of limited value

It is important to be clear about what is separate property and what is divisible property before you start dividing.

Step 5: negotiate the division

Here the actual negotiation begins. You can choose:

• Equal division (50/50): The starting point in Danish law, where the net assets are divided equally
• Unequal division: A different split, for example 60/40, or one party taking over the home in return for buying the other out

Important questions to discuss:

• Who takes over the home, and at what valuation?
• How is the joint debt handled?
• Should one party be compensated for career sacrifices?
• What about the contents and personal belongings?

If you find it hard to agree, the Agency of Family Law can offer advice and mediation.

Step 6: draw up the division agreement

When you agree on the division, the agreement must be written down in a division agreement. A good division agreement should contain:

• The parties' full names and civil registration numbers
• The cut-off day for the division
• A complete list of assets with values
• A complete list of debt
• The agreed division of each asset
• An agreement on who takes over the joint debt
• Provisions on any equalisation payment
• Both parties' signatures
• The date of signature

Step 7: carry out the agreement

When the agreement is signed, it must be carried out. This typically means:

• Transfer of real property (registration)
• Re-registration of cars
• Transfer of bank accounts and securities accounts
• Redemption or takeover of loans
• Payment of any equalisation sum

Set clear deadlines for the implementation in the agreement, so both parties know when what is to happen.

Pensions on divorce

Pensions are one of the most complicated elements in a division. The rules are in the Act on spouses' financial matters, which came into force on 1 January 2018.

Main rule: pensions are taken out in advance

As a rule, each spouse keeps their own reasonable and usual pension schemes, which are taken out in advance and therefore not included in the ordinary division.

Exception: pension compensation

If there is a significant difference in your pension savings, for example because one has been a homemaker or part-time for the sake of the family, the one with the smaller pension may, depending on the circumstances, be entitled to compensation. This typically requires:

• A marriage of longer duration
• A marked difference in the pension savings
• That the difference is connected to the way you have arranged the marriage

Pension equalisation is a complex area, and it can be wise to seek advice.

Home and real property: who takes over the house?

The home is often the largest asset in the division and the most sensitive point. The typical scenarios are:

One party buys the other out

One spouse takes over the home and compensates the other for half of the equity (the home's value minus the debt). This requires:

• An independent valuation of the home's market value
• That the taking-over spouse can finance the takeover
• Registration of the change of ownership

The home is sold

If neither can or will take over the home, it is sold and the proceeds divided. This is often the simplest solution.

A temporary arrangement

In some cases, the parties agree that one stays for a transitional period, for example for the sake of the children. This must be specified in the division agreement.

Debt on divorce: who is liable for what?

• Joint debt (for example a joint mortgage): Both are liable towards the creditor, unless you agree otherwise with the creditor.
• Personal debt (loans taken out in one's own name): The spouse in question is liable themselves.

Be aware that a division agreement governs the relationship between you, but it does not change your relationship with the creditors. If you have joint debt and one is to take it over, the debt should be transferred to that one's own name with the creditor's acceptance.

Unequal division: when does it make sense?

An unequal division can be relevant if:

• One spouse has contributed significantly more to the assets
• One has given up a career for the family's sake
• There are practical considerations, for example the children's need for stability
• You want to avoid a forced sale of the home

An unequal division requires agreement and should always be documented thoroughly in the division agreement to avoid later conflicts.

Timeline: how long does a division take?

The timeframe varies, but here is a realistic overview:

Phase	Typical duration
Application for divorce or separation	1-2 weeks
Settlement of assets and debt	2-4 weeks
Negotiation on the division	2-8 weeks
Drawing up the division agreement	1-2 weeks
Implementation (registration, transfers)	4-8 weeks
Total typical process	2-5 months

If you agree from the start, the process can go significantly faster. Conversely, disagreements and public administration can drag the process out for many months or even years.

Frequently asked questions about divorce and division

Can you do the division without a lawyer?

Yes. In Denmark there is no requirement for a lawyer to be involved in the division. The parties can make a division agreement themselves, as long as both agree. With complex financial circumstances, for example business ownership or property abroad, it can, however, be wise to seek professional advice.

What happens if we cannot agree on the division?

If you cannot reach agreement, you can ask for public administration through the probate court. An administrator then takes over the process. It is more expensive and time-consuming, but it ensures that the division is carried out.

Is a division agreement legally binding?

Yes. A signed division agreement is a binding agreement between the parties. It can, however, be set aside if there is fraud, a failure of assumptions, or if it is clearly unreasonable for one party.

Can we agree the division before we apply for divorce?

Yes, you can prepare a division agreement in advance, and it is often a good idea to have the basis in place before you submit the application. The agreement should, however, be tied to the formal cut-off day.

What about debt that exceeds the assets?

If the assets are negative (more debt than assets), you must still deal with the division of the debt. Each spouse is liable for their own debt, while the division of joint debt must be agreed in the division agreement.

Does the division agreement have to be registered?

The division agreement itself does not have to be registered, but if the agreement involves a transfer of real property, the change of ownership must be registered with a deed at the Land Registry.

What does public administration cost?

Public administration costs a court fee plus a fee to the administrator, which typically makes up a share of the estate's value. In total, the costs can become significant, and a private division agreement is therefore far cheaper.

Checklist for the division on divorce

• Apply for divorce or separation to the Agency of Family Law
• Fix the cut-off day
• Settle all assets (property, bank accounts, cars, investments)
• Settle all debt (loans, credit, student debt)
• Identify separate property and personal rights
• Clarify the pension situation
• Negotiate the division, and seek mediation if needed
• Draw up a written division agreement
• Sign the agreement
• Carry out transfers, registration and the transfer of loans

Conclusion

The division of property is often what takes up the most in a divorce. If you agree, you can make a binding division agreement yourselves that gives you full control over the division and is far cheaper than public administration. Make sure to settle both assets and debt, get clarity on what is separate property, and remember that the agreement does not change your liability towards the creditors. With complex circumstances, especially a business, pension and real property, it can pay to involve a lawyer or accountant.

---

The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer for advice on your specific situation.