An important, yet often overlooked element of estate planning and asset management is revisiting the marital property regime during your lifetime. The regime chosen at the beginning of the legal relationship may not best suit your needs years later. The good news is that it can be fixed!

In Estonia, if spouses or registered partners do not choose differently, the legally applicable regime is joint property. This means that all assets and rights obtained during the marriage or partnership will be deemed to belong to both parties in undefined parts. Although this is clearly set in law, often times the information is not correctly portrayed in relevant public registers, such as the commercial register or land register, with only one partner mentioned as owning the shares in a company or a property.

Family law prescribes that any transaction with jointly held assets can be concluded by both partners jointly. Recent Estonian Supreme Court practice has seen several cases where this principle has been tested and reconfirmed:

In 2017, the Supreme Court stated that the obligation to manage jointly owned assets together, with both parties consenting, is imperative and takes precedence over property law regulation, by which immovable property may be possessed in good faith when relying on the information included in the land register.

  • The land register demonstrated only one spouse as the legal owner of the property although it belonged to joint marital assets, thus the entry in the land register was incorrect.
  • The case was peculiar as all transactions regarding immovable property must be notarized and the notary normally double-checks the ownership of the property when the seller is married.
  • When in doubt as a buyer, marital property regimes are publicly available in the Marital Property Register (in Estonia), providing the opportunity to verify which regime the couple has chosen for which assets.

In 2018, the court stated that in case assets have been transferred out of the spouses’ possession, the claim for repossession can be submitted by one spouse independently, if the purpose of the reclaim is to restore joint possession of the asset.

In 2022, a wife was successful in turning back the husband’s transaction by which jointly held shares in two Estonian companies were placed into a Maltese foundation as part of estate management in preparing for old age.

  • The transaction was initially made possible due to the fact that both in the Estonian Central Register of Securities, and later on in NASDAQ, the joint property regime was not properly transcribed, showcasing only the husband as the owner of the shares.
  • Although the courts may replace a spouse’s consent to a transaction, it is possible only when refusing consent is in conflict with good faith principle or collaboration duties of the spouses, and the transaction was necessary for governing the marital assets and in line with ordinary management of assets.
  • The court did not condemn the purpose of “better management of investments and professional asset management for shared family interests” but sided with the wife due to the fact that the husband failed to show what damages would have been caused, had the shares not been moved into the foundation.

Comparative insight – Latvian and Lithuanian Supreme Court practice

Similar principles have been reaffirmed in Latvian Supreme Court (Senate) case law, highlighting that the formal entry of ownership in the Land Register on one spouse’s name does not automatically exclude the existence of joint marital property. Latvian law expressly provides that a spouse may transfer the management of his or her property or share in the jointly owned property to the other spouse, who is then obliged to preserve and protect it with due care. Consequently, when immovable property is registered under one spouse’s name, it is presumed that the other spouse has transferred his or her share for management purposes, and the property remains part of the joint estate.

In a 2023 judgment, the Latvian Supreme Court further clarified that if the spouses change their marital property regime to full separation of property, the marital agreement becomes binding on third parties only after registration in the Marital Property Register and, for immovable property, also in the Land Register. The court emphasized that a marital agreement recorded in only one of the public registers – for instance, solely in the Marital Property Register – does not have effect against third parties with respect to immovable property.

Under the Land Register Law, when entering ownership of immovable property for a married individual, the relevant marital property regime must be indicated, specifying whether the property is part of the spouse’s separate property. Such annotations ensure transparency in property relations and protect third parties who rely on register entries. Where spouses agree that a particular asset shall be one spouse’s separate property without altering the general statutory regime of joint property, such an agreement must be duly reflected in the register. For all other assets not covered by such agreements, the presumption of joint marital property remains.

Meanwhile, under Lithuanian law, when property belongs jointly to spouses, both must be recorded as owners in the public register. Even if the property is registered under only one spouse’s name, it is still considered joint marital property, provided that it is indicated in the register. However, the Lithuanian Supreme Court (the Court) has emphasized that, in practice, the law is not always interpreted unequivocally.

The Court clarified that registration in the public register serves merely to make ownership rights public, and it does not determine the legal status of the property itself. Therefore, if joint marital property is not properly reflected in the register, its legal status remains unchanged – it continues to be joint marital property. As a result, in cases where determining ownership is crucial, such as disputes or divorce proceedings, the court cannot rely solely on the public register.

In 2011, the Lithuanian Supreme Court emphasized that when preparing the spouses’ property balance and identifying their common assets, the court must verify the accuracy of the data recorded in the public register. This verification should be based on the legal provisions defining when property is considered joint marital property and when personal property becomes joint marital property. The Court confirmed in 2024 that, when dividing the spouses’ property upon termination of marriage, it is the court’s duty to draw up a fair and comprehensive balance of their assets – one of the key steps in ensuring an equitable division. At the same time, the parties must provide evidence to substantiate their claims, such as prenuptial agreements or proof of the source of funds used to acquire the property.

There are several reasons why the data in the public register cannot always be relied upon:

  • In some cases, property that was originally personal property becomes joint marital property under certain legal provisions. Lithuanian law provides that one spouse may acquire joint ownership of the other spouse’s personal property if they have substantially improved it using their own personal funds. However, such circumstances can only be established by a court.
  • Under Lithuanian law, if a spouse does not explicitly declare that property is being acquired as personal property, it is automatically presumed to be acquired as joint marital property. Consequently, certain assets acquired in joint ownership but registered under only one spouse’s name may not be properly reflected in the public register.
  • Other circumstances may also lead to discrepancies. For instance, in a 2019 case, property was acquired as personal property by an individual who was married. However, the marriage had been concluded in Jamaica and had not yet been registered in Lithuania at the time of the transaction. Since the notary was unable to verify the existence of the marriage, the property was recorded as personal property in the Land register. The court later held that the mere declaration of intent to acquire property as personal property was not sufficient to establish such ownership and that other relevant circumstances had to be taken into account (i.e. the source of funds used to acquire the property).

What are the key takeaways?

  • Be mindful of which assets should be require joint governance – perhaps the family home, shares in the family business versus shares in a company relevant to one spouse’s specialty only.
  • Check that the relevant registers are up to date and if not, request the entries to be corrected.
  • Undivided joint marital assets require joint decisions even in case the property regime has later been changed to separateness of property or another regime under local law or post-divorce.