The morning after the words ‘I do’ have been said, the reception is over and the newly-weds head to their honeymoon dreaming of their new journey together, they will wake up to a new financial reality which they themselves may not be aware of.
Maltese law stipulates three types of matrimonial regimes which regulate the financial aspect of a couple’s married life – Community of Acquests, Separation of Estates, and Community of Residue under Separate Administration. Every one of these regimes will affect the financial relationship between the spouses in different ways since every regime places a different focus on who is responsible for the financial position of each spouse during marriage, and how this may affect the other spouse.
Legally, any property which each spouse would have individually acquired prior to the marriage or inherited, whether before or after the date of marriage, is considered to be solely owned by that spouse as his/her paraphernal property.
While many may be aware that they have a right to enter into a pre-nuptial agreement, few are aware that unless such an agreement has been entered into, the law automatically applies the Community of Acquests to all those persons who have either celebrated their marriage in Malta, or, having celebrated their marriage abroad, subsequently established themselves in Malta.
The Community of Acquests can be defined as a partnership of assets which the spouses acquire as from the date of their marriage through their work and savings. This means that any income derived by either of the spouses in his/her personal name, is not solely owned by such spouse, but is now jointly owned by both spouses. Each of their salaries no longer belongs to the person to whom such salary is due, but now belongs to both spouses equally – what’s mine is yours, and what’s yours is mine.
More and more couples are looking into the possibility of entering into a pre-nuptial agreement
Apart from co-owning any income acquired by either of the spouses during marriage, the law provides a list of acts which are deemed to be extraordinary and are therefore to be carried out by the spouses jointly. These include: purchase and sale of immovable property, granting of hypothecs, borrowing and lending of money and purchasing of movable or immovable property by hire-purchase agreements. Although this list is not exhaustive, and there may be some exceptions as outlined in the law, it is clear that upon saying ‘I do’ it is truly a situation where two become one.
While the Community of Acquests may still be the most common matrimonial regime, more and more couples are looking into the possibility of entering into a pre-nuptial agreement in order to do away with this regime, opting instead for the Separation of Estates.
The Separation of Estates allows for a more individual financial position by giving each spouse full financial autonomy. The reason for this is that each spouse will remain the sole legal owner of anything acquired by him/her during the marriage and consequently, the extraordinary acts listed in connection with the Community of Acquests would not apply. Separation of Estates allows the spouses to be financially independent, where the notion of what’s mine is yours and what’s yours is mine is not a legal obligation, and therefore need not be applied.
Of course, any marriage cannot be dealt with only in terms of the matrimonial regime applicable to such marriage. While the law must be adhered to and applies to all those who enter into marriage, the above is just an outline of some of the financial implications of marriage on the two individuals who have vowed to love each another till death do them part. While trying to create a legal framework to an emotive subject may seem to be illogical to those in love, one must keep in mind that the honeymoon period is not everlasting and that the reality of everyday life will soon kick in.
Dr Caroline Dimech is a legal advisor at Bank of Valletta.
Bank of Valletta p.l.c. is a public limited company licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).