Managing assets owned by spouses

Managing assets owned by spouses

Matrimonial re­gimes are systems applicable to married couples by means of which their financial and assets position is regulated. Upon marriage, every couple, unless they agree to the contrary, adopt the community of acquests – the most common matrimonial regime.

The community of acquests means that everything earned or bought during marriage belongs to both spouses in equal shares. That is, if the husband decides to buy a car, half of that vehicle’s value automatically belongs to the wife. All of the husband’s earnings and all the wife’s earnings are shared and divided equally.

What remains belonging exclusively to the husband or to the wife is anything which is paraphernal, that is, anything that used to belong exclusively to either spouse before contracting marriage. For example, if the wife, before getting married, had purchased a summer residence, it would belong exclusively to her and the husband has no claim over it. Many married couples adopt this matrimonial regime by default – sometimes because they do not know of the existence of the other available regimes and sometimes because community of acquests suits them best.

When separation ensues, and if a married couple had adopted this regime, everything should be divided in half except, obviously, anything which was paraphernally owned. It is irrelevant whether the wife or the husband worked more than the other spouse, earned more than the other spouse, or effectively, did not work at all. It also does not matter whether one of the spouses remained at home and, thus, did not contribute financially while the other spouse was the breadwinner. In the community of acquests, everything is shared equally.

Is this regime family friendly? Who does it protect?

This type of matrimonial regime has at its heart the well-being of the family because, since everything that is earned or bought is shared equally between the spouses, then each spouse is protected, no matter how much s/he contributes to the family’s financial pool. In case of separation, the spouse who would have remained at home will not end up with nothing. Although wives and husbands who choose to take care of the home might not contribute financially, they are nonetheless contributing to the family’s well-being by looking after the matrimonial home and all this is unpaid work that enriches the family’s well-being.

However, one disadvantage in the community of acquests’ regime is liability. If one of the spouses incurs debts of such an amount that cannot be paid, the creditors have a right to turn onto the community of acquests to get paid. This can ruin the financial situation of any family.

If one looks from the perspective of the creditors, they have a right to get paid and so it is justified to be able to turn onto the community of acquests to do so. Is that absolutely justified? What about the children and the other spouse? They would be caught in a situation where they would have to suffer. It’s a “catch 22” situation, that is, a creditor would suffer if s/he is not allowed to turn onto the community of acquests to get paid but, on the other hand, the family would suffer financially if justice is sought by the creditor.

Although the community of acquests is the most popular matrimonial regime due to the fact that it takes place ipso jure between the spouses so long as there is no agreement to the contrary, there are still two other regimes available in Malta and Gozo.

The second most popular regime is the separation of estates, where the spouses would have nothing in common and everything would be paraphernal or separately owned, earned, bought. Obviously if, for example, a house is bought conjointly, then the spouses would have co-ownership up to the share they would have paid. This regime can apply when one of the spouses is in business or when one of them is financially much better off than the other. However, is it family friendly at the end of the day if one is making a distinction between a richer and a poorer spouse? One argument in favour of separation of estates is protection of the other spouse. But to what extent? Upon separation the “poorer” spouse would still be worse off.

The third regime is the Corsa – community of residue under separate administration, which is not that popular compared with the previous two.

The two most popular regimes in Malta both have their advantages and disadvantages and both are fashioned in a way to protect the particular spouses in a different way and to different degrees. It is up to both spouses conjointly to decide which regime to adopt. Unless they want to adopt a particular regime by means of a public act, the community of acquests kicks in automatically.

The author is a lawyer and a published author with a special interest in family law and child law.

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