Divorce and division of property in Norway: what you need to know

What is «skjevdeling» (unequal division of value of assets)

Skjevdeling gives the right to keep certain assets out of the divorce settlement. They represent an exception from the main rule that the value of assets is to be divided equally. We have written a general overview of Norwegian marriage law, which is available here:

• Application and the basics of Norwegian family law

Values that constitute «skjevdeling» would be values that can be clearly traced back to inheritance, gifts, or assets acquired before the marriage. The rule on skjevdeling is found in the Marriage Act, Section 59.

When an asset can be subject to skjevdeling, it means they do not need to be divided with the other spouse, but will go entirely to the spouse requesting the skjevdeling. These values are thus excluded from the division of the marital property.

This article provides an overview of the key rules on skjevdeling. For more detailed articles on specific topics in Norwegian, you can read further about:

• Skjevdeling: When can a spouse divide values, and what documentation is required?
• Skjevdeling of businesses

Which assets can be subject to skjevdeling? (including real estate, shares, bank accounts and cryptocurrency)

Skjevdeling applies to values, not necessarily assets. This means it’s not the assets themselves, but the values tied to them, that can be excluded from division as skjevdelings funds.

Skjevdeling will have the most financial significance for valuable assets. These typically include:

1. Property (homes, vacation cabins, rental properties, etc.)
2. Businesses (shares, stakes, sole proprietorships, etc.), and
3. Bank accounts (savings accounts, stock accounts, investment funds);
4. Cryptocurrencies (Bitcoin, Ethereum, Ripple).

Other assets may include:

1. Cars, boats, and motorcycles
2. Personal property, including artwork and jewellery and intellectual property

The entire or partial value of an asset can be excluded as skjevdeling

If an asset is fully financed through inheritance, a gift, or funds acquired before the marriage, the entire value of it can, as a general rule, be excluded from division as funds subject to skjevdeling.

However, if the asset is partially financed with other funds (such as salary or loans), only the portion financed by skjevdeling funds can be excluded. This is known as proportional skjevdeling.

Skjevdeling in Real Estate

If a home or cabin is acquired before the marriage or received as a gift or inheritance, its entire value can be excluded from division. If the asset is mortgaged, the skjevdeling claim will generally be limited to the portion of the value not financed with shared marital funds.

If debt, such as a mortgage, has been paid off with skjevdeling funds, the nominal repayment—adjusted for inflation—can also be excluded from the division. This is in line with Supreme Court precedent, particularly from the ruling Rt. 2008 p. 769, and is considered established law.

Skjevdeling of Shares

In the case of shares, it’s not the company itself that is subject to skjevdeling, but the individual shares. However, the entire company can be excluded from division if all the shares can be traced back to skjevdeling funds.

An important basis for skjevdeling of shares is the Companies Act, which sets mandatory rules for converting financial value (money) into shares. Rules on this are found in the Companies Act, Chapters 2, 10, and 11, which deal with company formation, capital increases (issues), and debt conversion.

The question then becomes whether skjevdeling values were converted into shares through these processes. If the shares were financed with marital property, they will be part of the marital estate. It may also be the case that the shares were given as a gift, inherited, or existed before the marriage.

If the spouse has borrowed money for the company, which is relatively common, the issue will be whether the loan was financed with skjevdeling values. If so, the loan or the shares (if the loan is converted into shares) may be subject to skjevdeling.

Skjevdeling of shares in a company can present special challenges if one spouse has worked in the company. To ensure a clear distinction between the company’s finances and the spouse’s private finances, it’s important that the spouse receives a market-based salary. Several major cases have shown that if the separation between personal finances and company finances is not clear, substantial skjevdeling values may be lost.

Additionally, the valuation of shares can be as important as partial skjevdeling. While a company is generally valued based on its market value, there are rules stating that personal goodwill is not be given weight in the assessment. Furthermore, the value may need to be adjusted for liquidity and minority discounts, as well as latent taxes. We have written an article on purchase and sale of business entities in Norway in English, which might be of relevance:

• Purchase and sale of business entities in Norway.

To avoid uncertainty and ensure that skjevdeling values are preserved, it may be advisable to agree on full or partial separate property for the business. Assets that are separate property are not subject to division in a divorce, except in very specific situations.

What are the conditions for skjevdeling?

The values must be “clearly” traceable,

Skjevdeling requires that the values can clearly be traced back to marriage, inheritance, or gifts. This clarity requirement («clearly traced back») involves the following:

1. The burden of proof lies with the spouse demanding skjevdeling. He or she must provide the necessary documentation to substantiate the claim.
2. Strict standards of proof apply, meaning the facts must be relatively clear. If there’s sufficient doubt, the skjevdeling claim will be lost
3. Substitution of values, for example, transferring skjevdeling funds from one property to another, does not by itself mean that the skjevdeling claim is lost
4. A temporary mixing of funds (for instance in a bank account) does not automatically result in the loss of the skjevdeling claim, and there is freedom of evidence presentation. However, it doesn’t take much mixing of values before the skjevdeling claim is lost.

Whether the clarity requirement is met must be assessed on a case-by-case basis.
There are also different considerations depending on which assets contain skjevdeling values. For example, mixing is more common with current accounts than with savings accounts or real estate. For businesses, completely different assessments apply. For example, failure to by the spouse to claim market-based salary in their own company, will result in salary (marital assets) remaining in the company, which in turn can lead to mixing of skjevdelings funds and other funds (remaining salary) that affects the skjevdeling claim.

Skjevdeling values must be identifiable as a “value” at the cutoff date» for division (divorce or separation)

The skjevdeling claim is a value claim. This entails that the skjevdeling claim must clearly be identifiable as a value at the cutoff date (the date of divorce or separation).

As skjevdeling is a value claim, this means that it is current value that is subject to skjevdeling, even if the asset has increased or decreased in value.

Can skjevdeling claims be lost?

A skjevdeling claim will be lost if the conditions no no longer are met. For example, if the values are consumed or mixed in such a way that skjevdeling is no longer possible.

A skjevdeling claim can also be limited or lost if excluding the value would lead to an “obviously unfair result”, as stated in the Marriage Act, Section 59, second paragraph. The economic situation of the spouses at the time of settlement, their future income potential, the duration of the marriage, and the spouses’ contributions are central to this assessment. This provision is a narrow exception but may apply in special situations.

Extended skjevdeling for strong reasons

Even if the conditions for skjevdeling are not met, a spouse may request skjevdeling if strong reasons justify it, as per Section 59, third paragraph of the Marriage Act. This is a narrow exception, so the reasons and justification must be significant.

Practical cases where there may still be grounds for extended skjevdeling include when a spouse’s business is in the marital estate, and an equal division would make it difficult to continue the business.

Practical tips for skjevdeling in divorce:

1. Gather and Save Documentation: It’s important to have good documentation of any values that may be subject to skjevdeling. This can include gift receipts, bank statements, inheritance papers, or documentation from previous property purchases (e.g., contracts, settlement statements, and acceptance letters).
2. Seek Professional Advice: Skjevdeling can be a complex process, especially with shares, businesses, real estate, or cryptocurrencies. An experienced lawyer can help ensure your rights are protected.
3. Be Aware of Marital Property: If you have “shared” finances with your spouse, it’s essential to be mindful of what constitutes marital property and what can be excluded through skjevdeling.
4. Be Cautious of Mixing Assets: Avoid mixing skjevdeling values with marital property, as this could lead to the loss of the skjevdeling claim.
5. Consider Separate Property for Valuable Assets: It may be wise to agree on full or partial separate property for valuable assets such as businesses and real estate. This will avoid some of the challenges associated with skjevdeling cases.