Living together in the Netherlands: Pension equalization and inheritance law

This is the third blog in our series Living together in the Netherlands, in which we discuss the legal aspects of pension and inheritance law. Living together involves not only financial arrangements and property relations, but also issues related to pension and inheritance law. What happens to accrued pension rights in the event of divorce? And is one partner automatically entitled to the estate of his or her ex-partner in the event of death? This blog discusses the legal aspects of pension equalization and inheritance law for married couples, registered partners and cohabiting couples.

Pension Equalization: What does the law say?

Under Dutch law, pension rights acquired during a marriage or registered partnership are equalized in the event of divorce on the basis of Article 1:155 of the Civil Code. This means that both partners are entitled to an equal share of the pension accrued during the marriage, unless other arrangements have been made.

The law applies to all matrimonial property regimes, both community property and prenuptial agreements. The standard legal division is 50/50. However, partners may agree in a marriage contract, partnership agreement or divorce settlement to deviate from this standard and waive the equalization of pensions.

If a spouse or registered partner dies prematurely, the surviving partner is entitled to a survivor's pension, unless otherwise agreed.

Cohabitants' pension rights

Different rules apply to cohabitants. In principle, they are not entitled to a pension adjustment in the event of divorce, even if they have been living together for a long time.

• Cohabitees are not covered by the Pension Equalization in the Event of Divorce Act. This means that they are not entitled to a share of their ex-partner's pension when the relationship ends.
• A pension distribution clause can be included in a cohabitation agreement, which explicitly sets out the pension arrangements.
• Some pension schemes accept cohabitees as partners for pension equalisation purposes, provided a declaration is made immediately after the cohabitation agreement is concluded. If this declaration is not made, the partner is often not recognized by the pension fund.

Different rules also apply to cohabiting partners in the event of death:

• If the cohabiting partner is not registered as a partner in the pension fund, there is no entitlement to a survivor's pension.
• Formal registration with the pension fund is often required in order to claim a survivor's pension

Inheritance law: Legal protection for partners

Dutch inheritance law automatically protects married and registered partners.

• If a spouse or registered partner dies without a will, the statutory inheritance rules in Book 4 of the Civil Code apply.
• The surviving spouse or registered partner automatically receives the inheritance.
• A partner can only be excluded as an heir by a will.

In exceptional cases, the law may exclude a spouse as an heir, for example in the case of a serious crime such as murder.

Inheritance law for cohabitants

Inheritance law does not automatically protect cohabitants.

• If one partner dies without a will, the surviving partner has no legal right to an inheritance.
• In this case, the deceased partner's relatives inherit according to the law of intestacy, which can leave the surviving partner with no rights after years of living together.
• The only way for a cohabiting partner to become an heir is to make a will.

If there is no will, the surviving partner may have to leave the home if the deceased partner's legal heirs claim the inheritance.

Conclusion

Pension rights and inheritance law are important legal issues for both married and cohabiting couples. While married and registered partners are automatically entitled to the pension rights and inheritance of their spouse or registered partner, unless otherwise provided for in the will, cohabiting partners must explicitly establish these rights in a cohabitation agreement and in the will.

Recommended steps for cohabitants:

• Draw up a cohabitation agreement and include a pension distribution clause.
• Check with the pension fund whether your partner is recognized as a partner for old-age and survivors' pension purposes and register in good time.
• Make a will naming your partner as your heir.
• Consult a notary or legal specialist to ensure your position in terms of inheritance and pension rights.

By taking these steps, cohabitants can better protect themselves legally against financial uncertainties in the event of divorce or death. In our blog series Cohabiting in the Netherlands we discuss other important legal issues. See also our previous blog in this series on property relations.

Questions about pension equalization and inheritance law?

If you have any questions about the above or would like more information on this topic, please contact Sandra Verburgt, family law attorney, and Ivo Janssens, inheritance law and estate planning attorney.