In the field of marriage and civil unions, the management of economic assets between spouses can be governed under different legal models. Two of the most common are the community property regime and the property separation regime. Each establishes specific rules regarding the ownership and management of assets during the marriage and in the event of its dissolution, whether due to divorce or death. Here we explore each regime in detail to provide a clear understanding of its features, differences and How to know if you are married in community property or separation of property.

Profit regime

The property regime, also known as community property, is one of the most common in many legal systems, especially in countries like Spain. This regime is based on the idea that assets acquired by either spouse during the marriage are joint property of both, regardless of who acquired them.

Key features

  • Community property: Includes all income earned by either spouse during the marriage, as well as property acquired with that income. This may include salaries, investment dividends, business profits, and property purchased during the marriage, among others.
  • Private property: Each spouse can also have private assets, which are those that they already owned before the marriage or that they received as a gift or inheritance during the marriage. These do not enter into the common mass of assets.

Advantages

  • Simplicity in managing common income and expenses, since everything is considered joint property.
  • Financial protection for both spouses, ensuring that both share the economic benefits acquired during the marriage.

Disadvantages

  • Possible lack of individual control over common property. Any significant transaction requires the agreement of both spouses.
  • Complications in the event of divorce, since the division of assets can be complex and a source of conflict.

Separation of Property

In the regime of Separation of Property, each spouse maintains full ownership and control over the assets they had before the marriage and those they acquire individually during the marriage. This regime is common in several jurisdictions and is especially useful for couples who wish to maintain their finances independently.

Key features

  • Financial Independence: Each spouse manages their own income and property independently.
  • Individual responsibility: Each spouse is responsible for his or her own debts, unless they were incurred jointly for the benefit of the family.

Advantages

  • financial autonomy: Each spouse can make financial decisions independently without the need for the other's consent.
  • Simplicity in case of separation or divorce, since each person retains the assets that are in their name.

Disadvantages

  • Less financial protection for the lower-income spouse, which can result in significant inequalities in the event of divorce.
  • More complex management of common expenses, especially if there is no clear agreement on who pays what.

Choice of matrimonial regime

The choice between marital property and separation of assets depends on the personal and economic circumstances and preferences of each couple. It is crucial to consider these schemes before getting married, and in many jurisdictions, it is possible to switch from one scheme to another through a postnuptial agreement if circumstances or preferences change.

Therefore, understanding the implications of each marital regime allows couples to make informed decisions that best suit their future needs and objectives, ensuring more harmonious management of their assets and financial responsibilities within the marriage.

One die mold

Comment to Sentence 662/2012 of November 16, 2012 of the Provincial Court of Alicante.

1.- What is better? 

It is frequent arise the convenience or suitability of the matrimonial regime. In Catalonia In the Balearic Islands, the matrimonial regime (hereinafter REM) is that of separation of assets. In the rest of Spain, the REM belongs to the community. The best known is the community partnership. Briefly. According to the REM for separation of assets, each spouse owns the assets they had before marrying and those they acquire afterwards. On the other hand, in the REM of community property, each spouse owns the assets they had before marrying (proprietary assets) but those acquired afterwards (community assets) are common. And the fruits and income of the private property and those acquired with money or property from the community property are then acquired. 

What is better to agree -before getting married or after- the REM of separation of property or community property? Difficult question. The answer is not only legal; The answer depends on the type of family that is formed; of one's own culture; of personal expectations; even of beliefs. Many elements come into play.  Each has its advantages.

What I do think can be affirmed is that the REM for separation of assets is easier to understand and is clearer at the time of liquidation. 

2.- An example can help you

Sentence 662/2012, of November 16, of the AP of Alicante raises an assumption of divorce of a marriage that was governed by the legal REM of community property. 

The concrete question is the following. Faustino Bonet, the husband, before marrying Sonia worked in the family business. Once married, a limited company called "Troqueles y Fotograbados Bonet, SL" that happened to the individual company run by the father -Manuel Bonet-. This company had its capital increased during the marriage. After the years they divorced and in the inventory of the community property -the common patrimony- it was included:

 44,60% of the shares of the company «Troqueles y Fotograbados Bonet, SL».

Sonia, the wife, did not agree and wanted “100%” of the shares to be included, since in her opinion the company was entirely of a community nature. 

The court of first instance agrees with Faustino, but Sonia appeals. On appeal, the Provincial Court agrees with Faustino. Why? Basically, because it considers that the company was initially owned by the father and when a new company “Troqueles y Fotograbados Bonet, SL” was formed, there was a succession in the company and therefore cannot be considered a community asset. On the other hand, the shares acquired as a result of the capital increase are of a community nature. 

3.- Comment

From the point of view of the family business - which is what matters to us - there is no doubt that the community property regime represents an added problem for the business when the marriage divorces. What would have happened if the REM had been the separation of assets, for example the Catalan one? The business would be the husband's without discussion, but the wife would have a right to compensation for work at home or for work in the husband's industry. In addition, you would have a right to compensation for the equity imbalance if it had existed. 

What is better? It is difficult to answer. I am married in REM separation of property - for life. It seems clear and easy to handle. Is it fair? Yes and no. Yes in certain cases and not in others. In order to speak of justice, one must put the concrete case in divine justice, which is what he sees in what is hidden. 

Contact Contact the Bosch-Bages Notary in Barcelona to clarify all your doubts.