What Happens To My Assets When I Get Divorced In Japan?
Legal disclaimer: We do not assume any responsibility for the following article, about getting divorced in Japan and what happens to the couple’s assets. If you have any legal issues, please consult a lawyer.
When two people get married, a common vow is “Till death do us part.” Unfortunately, the reality often differs from what they promised at the altar. Or the Shintō shrine, commercial wedding hall, or just plain City Hall, as the case may be. In Japan, as of 2018, 34.69% of marriages end in divorce. Fortunately, this number has declined from previous years (although it’s still much higher than it was in the 1950s/1960s). Of course divorce is a process usually filled with heartbreak and other difficult emotions. However, there are also the practical aspects to consider, such as the law, and the division of assets. What happens to your assets when you get divorced in Japan?
It’s an important question that even non-Japanese either getting married, or already married, need to ask themselves. This is because divorces involving a foreigner are statistically significant in Japan. According to the Ministry of Health, Labour and Welfare in 2013, 7.1% of divorces in Japan involved a foreigner. Of that 7.1%, 6.5% were mixed couples, and 0.6% were couples in which both spouses were foreign. The 6.5% was the sum of two numbers: 5.1% and 1.4%. 5.1% represents divorces with a Japanese man/foreign woman; 1.4% represents divorces with a Japanese woman/foreign man.
How Divorce Works In Japan
Japan does not have unilateral no-fault divorce, unlike many other countries. In other words, someone besides the spouse needs to agree regarding the divorce: either the other spouse, or a judge. There are three different types of divorce here:
- Divorce by consent (協議離婚, kyōgi rikon): Mutual agreement and witnesses are necessary. You need to submit official divorce registration papers (離婚届, rikon todoke), in Japanese, signed by both spouses.
- Arbitrated divorce (調停離婚, chōtei rikon): (A) spouse(s) file(s) a petition with the court for mediation (or “conciliation”). There is no trial (yet); instead, mediators try to help reach a relatively amicable divorce without litigation.
- Divorce by trial (裁判離婚, saiban rikon): One spouse gets a judge to grant the divorce based on the actions (or inactions) of the other spouse. This involves a trial and evidence of (the) violation(s) of the Japanese Civil Code. The following are valid reasons for divorce by trial:
· Infidelity: The other person flirted, had an illicit love affair, or committed adultery with someone else.
· Not bearing or paying for the other’s living expenses
· Being absent for a long time (i.e. running away [e.g. to a foreign country], or the spouse present at the trial doesn’t know whether the other spouse is alive or dead)
· Domestic violence (the Japanese definition of DV includes not only physical, but also verbal abuse).
· A critical psychiatric disorder
· The two have been living apart for a long time.
In divorce by trial, one spouse might need to compensate the other. Typically, this is about ¥1 million. However, there have been cases in the past in which the compensation has been as high as ¥10 million.
Jurisdiction, And By When To Claim After Getting Divorced
First of all: Japanese laws may not always apply to divorces in Japan. If one member of the marriage is a Japanese with a “Habitual Residence” in Japan, then Japan probably has jurisdiction. However, in other cases (e.g. two foreigners with the same nationality), the laws of that country may apply. Where the defendant lives is also a factor. Jurisdictional laws also vary by country, so in some cases, two countries might claim jurisdiction and things could get complicated. Consult a lawyer.
If Japan has jurisdiction, hopefully, both spouses were able to agree on who gets what before the divorce became final. However, if not, the spouses have two years from the date of divorce to claim assets.
The Division Of Assets When Getting Divorced In Japan
In Japan, the ideal is that each spouse gets half of the “common property.” Common property is assets acquired during the marriage. Those acquired before the marriage, or through inheritance, are not common property. Common property includes bonds, cash, deposits, houses, land, shares of stock, etc.
Beware of hidden property. Your spouse might have assets that he/she doesn’t declare. This would be in an effort to avoid having to give you half of them, or half their value. Prepare carefully before the divorce and record evidence of all your spouse’s assets. It’ll be much more difficult to get this proof later.
Just because an asset is in your spouse’s name doesn’t mean it belongs to your spouse. Property acquired during the course of the marriage is common property. This is regardless of whether the registration has only one person’s name on it.
An appraiser can evaluate how much your assets, and your spouse’s assets, are worth. He/she comes up with a total amount. For example, let’s suppose that James and Yui get divorced. They have:
- A home worth ¥10,000,000
- A bank account worth ¥1,000,000
- Investments worth ¥8,000,000
- A car worth ¥1,000,000
The appraiser will take out his calculator and total up the numbers:
¥10,000,000 for the home + ¥1,000,000 in the bank account + ¥8,000,000 in investments + ¥1,000,000 for the car = ¥20,000,000 in total common property
Hopefully James and Yui can come to an amicable agreement about how to divide up those assets. Selling the house might be the easiest. For example, Yui could take the house and James could take everything else. Or they could sell the house (recommended, see below) and car, liquidate the investments, and convert it all into cash. Then each would get ¥10,000,000: a good, clean break.
If only people could be so reasonable. Maybe Yui is furious about something James did. James is enraged about something Yui did. In this case, if they can’t agree on the division of indivisible assets, it could go to court.
If the woman/their children live in the house, the court may grant her the house. This is especially true if she was a housewife. The court may side with her for the best interests of the children. Or maybe because she may not be able to qualify for a mortgage on her own. On the other hand, if the couple were living with the man’s parents, the court may grant him the house.
This goes not only for the house, but the car, etc. The side with the strong attachment may take over. If James was restoring a classic DeLorean in the garage, the court is likely to award that to him. Even if Yui claims it.
The Ol’ Mortgage Trick When Divorced In Japan
There are multiple problems with divorce and mortgages. The lender may not take kindly to the person whose name is on the mortgage no longer living there. The lender may take legal action. The spouse now living in the house might not be eligible to have the mortgage in his/her name, either. This may be due to a low income. For example, perhaps the spouse who now lives there makes only ¥2.5 million per year, but ¥3 million is necessary for the mortgage.
Another problem is if the couple has not yet paid off the mortgage at the time of divorce. In this case, the debt, as well as the equity in the home, enter into the calculations, complicating things.
In some cases, one spouse may agree to keep paying the mortgage. The family court may allow that spouse to pay a lower amount of child support in exchange (though not ¥0).
What if the spouse, in whose name the mortgage is, who no longer lives there? What if he/she stops paying the mortgage for whatever reason? Then the bank might foreclose on the home. Therefore, to avoid complication, many recommend that the two sell their house at the time of the divorce.
What Happens To My Assets When I Get Divorced In Japan? Conclusion
Divorce is an unfortunate fact of life in most countries, and Japan is no exception. Japan has no unilateral no-fault divorce. Instead, it has divorce by consent, divorce in which a third party arbitrates it, and divorce by trial. The legal ideal is that each party gets half the assets, with some exceptions. Hopefully the two can come to an amicable agreement, and selling the house may make this smoother. When they disagree over who gets which indivisible asset, or when there is still a mortgage, this complicates the situation. Consider contacting a lawyer.