Matrimonial property regime: Separation of property or community property?

What you should know before you get married!

When two people decide to get married, they must agree on the matrimonial property regime and foresee what will happen in case of divorce or separation.

It sounds very violent, but it is a decision that has to be taken in order to avoid legal misunderstandings.

The default matrimonial property regime in Spain, if nothing is said at the time of marriage, is the community of property. This means that, unless one of the parties wishes to oppose this with the drafting of the marriage contracts, the assets of each partner will be unified in the community of property.

Community of Profit and Loss Partnership

Article 1.344 of the Civil Code states that in a community of property "the profits or benefits obtained by either of the spouses without distinction are common to the spouses".

This means that, after the marriage, all assets acquired or received by one of the parties will remain within the community of property and both spouses will be able to use and enjoy them. In addition, in order to move forward in any economic or legal proceedings, both parties will have to give their consent.

If you have any doubts or questions about the clauses of the matrimonial property regime in which the spouses find themselves, our lawyers, experts in family law, can advise you on issues relating to the community of property and liquidation of community property.

It should be noted that within the community property regime, there are private assets that correspond only to the spouse who receives it, such as:

• Compensation for damages.
• Clothing and personal belongings.
• Tools of the trade, with exceptions.
• Property or assets owned prior to the marriage.
• Donations and inheritances.

If the marriage does not expressly state otherwise, the agreement will be governed by the community of property regime, however, there are marital contracts that can be made before or after two years of marriage, in order to record any aspect that you wish to exclude from the community of property regime.

What happens to debts if I am married in community of property?

If one of the spouses has received a debt in community of property, this debt is not shared and is not passed on to the other party in case of separation by mutual consent, with some exceptions.

On the other hand, if the spouse acquires assets and/or property, these become part of the community property, as it represents an increase in the benefit of the estate.

The exceptions provided for in the Civil Code, Article 1362, with regard to the debts presumed to be community property, are the financial support of the family in all aspects, especially food and education of common parents, the acquisition and administration of common and separate property, and the operation of the business.

If there is a parent belonging to only one partner in the marriage, the costs will be borne by the community of property, as this is part of the matrimonial property regime. However, when the spouses do not live together in the same domicile, but continue to share expenses, the partner with children must provide the other party with the amount equivalent to the expenses that have been incurred prior to the liquidation of the community of property.

Liquidation of community property.

If the spouses finally decide to divorce or if they want to do so by mutual agreement, the marital assets will be dissolved between the two parties, which means that, from that moment on, all material assets or debts acquired by each of the spouses will be their own, i.e. of a private nature.

The distribution of the capital takes place at the moment when the liquidation of the community property stipulated in the matrimonial property regime is carried out, i.e. when the divorce becomes effective. However, this is not to be confused with the dissolution of the community property, which refers to the distribution of the community property that has not yet been received.

The legal procedure for the liquidation of community property in divorces by mutual consent will be established by decree, if there are no minor or incapacitated children, in which case the ruling on the settlement agreement will be issued by the judge.

If the spouses appear before a notary to process their divorce, they will be able to establish the clauses of the agreement for the liquidation of the community property, previously revised, in case there are any incongruities detrimental to one of the members or parents. In the event of such inconsistencies, the competent judge would be the one to approve or refuse the agreement.

The liquidation of community property may also occur in a contentious divorce, when the spouses do not reach an agreement. In this case, the procedure would be carried out through the Civil Procedure Act, which could be carried out at the same time as the divorce decree. It consists of the following stages:

i. Formation of inventory: where the assets and rights of the active capital, such as property and financial material, and passive capital, such as loans and debts with presumption of community property, would be established.

ii. Liquidation: Firstly, the payment of common debts will be carried out and then the distribution will take place.

In short, depending on the situation, there are different ways of executing the dissolution and liquidation of community property. Each case is unique, so it is always advisable to seek advice from a professional expert in divorces and separations, to help us manage the distribution of property in a fair and equitable manner.