Marital Property Regimes in Spain
With over two decades of experience in Private Civil Law, Carmen Calderón brings a unique global perspective, combining legal expertise with a keen psychological understanding to approach each case. Carmen’s innovative working method, involving in-depth analysis and strategic guidance, positions her at the forefront of resolving complex judicial cases. Join us as we delve into her insights and experiences in this specialized and ever-evolving legal field.
To give a framework for this discussion, can you please give a broad overview of the three main marital property regimes in Spain - economic, participation and separation?
The marital property regime is the set of rules that regulate the legal form in which the property of the spouses is organized and managed, which includes the private property of each and the common property of both.
In Spain, we are not talking about a single piece of legislation for the whole territory of the State, nor about a single marital property regime. All Spanish citizens have, in addition to Spanish nationality, a specific civil neighborhood, which is what determines their subjection to the common Civil Law, the majority in the territory of the State, or to the special or regional Civil Law of some Autonomous Communities.
The Autonomous Communities with competence in Civil Law are Aragon, the Balearic Islands, Catalonia, Galicia, Navarre, the Basque Country, and Valencia. All of them, except Valencia, have passed special or regional Civil Laws concerning marital property regimes. This circumstance gives rise to multiple possibilities depending on the civil neighborhood of each of the spouses, so when deciding and/or modifying the marital property regime, it is necessary to be perfectly advised by a skilled Lawyer to understand the differences that exist between each of the existing regimes.
In the territories where common Civil Law is applied, the Law regulating marital property regimes is the Spanish Civil Code. This Law provides for three main types of regimes: Community of Property Society, Separation of Assets, and Participation Rules.
In broad strokes, the Community of Property Society is the most widespread type of regime in the territories where common Civil Law is applied. The Community of Property assumes that all property obtained during the time that said regime has been in force is common, in half, to both spouses, regardless of who contributed it. Both spouses benefit equally from the individual gains. But they also take responsibility for all existing obligations, no matter which one of them would have. At the time of liquidation of the scheme, by dissolution or modification of the scheme, assets and liabilities will be divided in half.
Alternatively, the Separation of Assets regime allows the individual property of each of the spouses to remain differentiated. Each spouse manages and administers his or her own assets and liabilities with no other economic ties than those derived from cohabitation and respective family burdens. One spouse does not participate in the other’s profits nor in their losses. They may also have common assets, but they will always retain individual ownership of individual assets.
The third and least frequent regime, is the Participation, in which each of the spouses acquires the right to participate in the profits obtained by their consort during the time that said regime has been in force.
It is a hybrid model, because during its application time it functions as the Separation of Assets regime and, once extinguished, it is liquidated following a Community of Property Society regime.
In the Participation scheme both spouses enjoy full autonomy of property and separate assets. Once the regime is extinguished, its liquidation is opened to determine the initial and final estate of each of the spouses. If the difference between the assets shows a positive balance in both spouses, the one whose estate has had less growth will be entitled to receive half the difference between its increase and that of the other spouse.
The issue of the marital property regime is certainly complex because it requires a thorough knowledge of the applicable Law in each case and a skilful handling of all legal subterfuges. But it is also an ideal frame to achieve good estate planning, which will undoubtedly give security and confidence to the marriage relationship.
Under the separation regime, how is property ownership and financial responsibility handled between spouses? What are the implications for asset division during divorce?
The Separation of Assets regime grants spouses the freedom to manage their individual assets with absolute independence. The assets and private profits prior to the application of the regime, as well as those generated during its time of application, remain within the personal sphere of each person. This is also the case with obligations, which always remain under the umbrella of responsibility of the spouse who has assumed them.
When the Separation of Assets regime is dissolved, a liquidation is carried out in which a distinction is made between the assets and profits that form part of the assets of each of the spouses, without confusion. If during the time of application of the regime the spouses have acquired assets or have assumed obligations jointly, at the time of dissolution of the regime these will be distributed according to the percentage of ownership that each one holds.
These characteristics make the Separation of Assets regime a very attractive model, at first glance, for people who want to protect their assets from possible risks in the future as a consequence, for example, of a contentious divorce or a poorly planned inheritance.
However, the Separation of Assets regime can generate important imbalances in those situations in which one of the spouses has developed his professional activity in the labor market, generating greater assets and human capital that will be retained at the end of the relationship, while the other has dedicated himself exclusively to taking care of the family and the house.
To try to level this imbalance, the Law provides for a figure that is not always considered by those who prefer the Separation of Assets regime. We are talking about the Economic Compensation for Work Reasons, which responds to this situation at the time of liquidation of the regime.
This is a right obtained by the spouse who has contributed to the family responsibilities through work at home, caring for cohabiting relatives, or through unpaid or insufficiently paid work for the other spouse, and who therefore has not been able to obtain an increase in wealth comparable to that of someone who has been able to develop their professional career in the labour market.
The existence of various special or regional legislation in Spain offers different configurations and methods of quantification of the Economic Compensation for Work.
Among the Autonomous Communities that have assumed powers in matters of marital property regime, five of them have regulated the Separation of Assets, Aragon, Catalonia, Balearic Islands, Navarra, and Valencia. Although the Economic Compensation for Work Reasons has a greater impact in Catalonia and the Balearic Islands, where the automatic marital property regime, in the absence of an agreement, is that of Separation of Assets.
When considering a possible Divorce, it is strictly necessary to analyze the impact of the Economic Compensation for Work Reasons, which can be equivalent to a quarter of the difference between the increases in the assets of the spouses or even a greater amount.
How can couples choose a specific marital property regime, and what legal processes or documents are involved in making this choice?
When getting married, it is very important to choose a marital property regime that responds to the interests of the future spouses.
To choose and regulate the marital property regime, there is a tool that the Law puts at our disposal, the Marital Agreements.
The Marital Agreements are a form of contract that includes a set of agreements reached for the regulation of the patrimonial effects, that is, of economic content, that are a consequence of the marriage, whether of the spouses among themselves or of them with third parties.
To be valid, the Marriage Agreements must be made before a Notary, they must be recorded in a public document, the deed, and they must be registered in the corresponding Civil Registry.
Marriage Agreements can be made before or after getting married. When the Marital Agreements are prior to the celebration of the marriage, the chosen marital property regime will come into force after the celebration of the wedding, which must occur within one year from the signing of the public deed. Once the wedding has been celebrated, the chosen marital property regime will be valid from the signing of the public deed.
The marital property regime can be modified at any subsequent time if there is an agreement between the spouses. To do this, the modification must be recorded in a new public deed, authorized by a Notary, and must also be registered in the corresponding Civil Registry.
Are there any default rules that apply if a couple does not explicitly choose a specific marital property regime? How does the law determine the default regime in such cases?
Just as we have stated, the future spouses can choose and regulate their marital property regime, but if they do not agree on any, the one that corresponds to them will govern based on their civil neighborhood, which may be the common Civil Law, or special or regional Civil Law of some Autonomous Communities.
What should couples be aware of when choosing a marital property regime?
In my opinion, when choosing a matrimonial property regime, it must be perfectly clear that, if in the future there is no agreement between the spouses, we will not be able to modify the regime.
Therefore, before getting married, it is essential to obtain advice on the type of matrimonial property regime applicable in the territory and you should never sign a marriage contract without having detailed knowledge of all the consequences because it is possible that the relationship between the spouses change later, and it will not be possible to modify the agreements.
How often do you encounter situations where couples wish to modify their chosen marital property regime, and what are the processes involved in making such a change?
In my professional practice I work recurrently with this type of contract within what I call a pre-marital prevention plan, with which I manage to protect the interests at stake and provide stability to the property relationships between spouses. At this point, I would like to convey to Lawyer Monthly Magazine’s readers the utmost importance of planning the correct development of property relations after marriage.
Both the marital economic regime, as a framework, and the Marriage Agreements, as an instrument, can be used strategically to satisfy the client’s needs. That is why I insist on the convenience of working hand in hand with a Lawyer specialized in the matter, with a long professional career and a prestige backed by successes.
About Carmen Calderón
“I am a lawyer specializing in the prevention and resolution of highly complex judicial cases relating to marital property disputes, which, in addition to the unfolding family crisis, have related problems that require coordinated action.
I have my own Family Law boutique, the first in Spain to establish the concept of pre-marital prevention as a type of service focused on client protection, preservation of the interests at stake, and the guarantee of minimal wear and tear.
“My working method consists of approaching the situation from a global perspective, starting from an in-depth analysis to identify the legal and personal aspects to consider, advising the clients in each of their decisions, and directing them towards the ideal solution.
“I have a solid background in Private Civil Law, having dedicated myself specifically to Family Law for more than twenty years. Throughout my professional career, I have participated in a thousand procedures. I have an innate ability to psychologically analyze situations and manage emotional responses. All of this provides me with the necessary preparation to resolve any type of conflict, anticipating the consequences, preserving the interests at stake, and guaranteeing minimal wear and tear.”
Carmen Calderón
Email: abogada@carmencalderon.com
Tel: +34 676 947 492
www.carmencalderon.com
Published by: www.lawyer-monthly.com
