Settlement of community property

In a divorce with community property, it is essential to carry out the liquidation of the partnership. From this process, the distribution of said assets between both spouses takes place. This is an important issue that often raises doubts among couples who decide to put an end to their marital relationship. For this reason, we would like to clear up any doubts on the subject.

What is the liquidation of community property?

The liquidation of the community property is the process by which the assets accumulated by the spouses during the period of time they have spent together in marriage are divided equally. Generally, it occurs as a consequence of a divorce, although it is also compulsory in the event that the economic regime is changed to establish a separation of property regime.

How is the liquidation of community property carried out after divorce?

The liquidation of community property can take place in two ways. The first is known as 'ipso iure dissolution'. This occurs ipso jure in the following cases:

• The spouses agree on a different property regime after getting married.
• The legal separation of the spouses takes place.
• The marriage is declared null and void. The general rules apply only if both spouses acted in good faith.
• The marriage is dissolved by divorce or death of one or both spouses.

The other way of liquidating the community property is the so-called 'dissolution at the request of one of the parties'. It is possible to apply in the following circumstances:

• When the spouse who does not initiate the proceedings is subject to support measures for property representation or if he or she has been convicted of abandonment of the family.
• If the other spouse is bankrupt or has entered into an arrangement with creditors.
• If the other spouse has committed acts that could be considered fraudulent or at least endanger the rights of his/her partner within the partnership.
• Where there has been a de facto separation for more than one year.
• Where the other spouse has repeatedly failed to fulfil his/her obligation to inform his/her partner of the income from his/her economic activities.

When there is a seizure of community property, but only if the debts giving rise to the seizure are the property of only one spouse.

Therefore, this second scenario is the one that usually applies when we are faced with a case of liquidation of a community of property with debts. Obviously, it is more complex than the previous one as it does not necessarily entail the equal distribution of the assets.

How to settle the liquidation of community property

It does not matter whether we are talking about an express divorce in which the liquidation of marital property can be carried out before a notary or whether we are dealing with a contentious divorce that will require the intervention of a judge. In either case, the process consists of the following phases:

• Inventory. This is the first stage. It basically consists of drawing up a detailed list of all the assets shared by the couple. This is called 'assets'. On the other hand, it must also reflect the debts and charges on them, which is called 'liabilities'.
• Payment of debts. This is the next step. Article 1399 of the Civil Code states that maintenance debts have absolute priority over other debts. In the event that the debts exceed the value of the community property, the creditors may request their adjudication or sale.
• Division and adjudication of the community property. Once all debts have been paid, it is time to divide the remaining amount of the community property. This must be done in equal shares. However, the concept of preference will be applied with regard to those assets that are for personal and professional use.

Once this last phase of the process has been completed, the community of property is considered to be liquidated for legal purposes. Therefore, the economic regime that both spouses adopted when they got married is dissolved and each of them can go on to manage their assets as they see fit.

In short, in Spain, the community property regime is still the most common when a couple marries, although it is true that the separation of property regime has gained quite a few followers in recent years. The latter undoubtedly makes things much easier when it comes to partition, although it can be unfair for one of the spouses in certain circumstances (for example, if one of them works and the other takes care of the children). In any case, we hope we have cleared up all your doubts about how and in which situations it can be dissolved.