Marriage settlements and their influences
A marriage settlement is the set of rules of law that the couple adopt to organize their relations in financial terms. The marriage settlement only applies to married persons. The spouses are entitled to choose their marriage settlement. There are two ways to choose it: first, by signing a marriage contract with a notary before the wedding, the second by doing nothing! The "legal regime" of the community property of acquisitions will apply automatically.
The choice of a matrimonial status has an influence on the loan (conditions of obtaining, repayment terms, and position as co-borrower) or even more broadly on the management of acquired property. There are several marriage settlements and each will have different consequences on the loan.
It is necessary to discern four different marital statuses:
• The regime of community property of acquisitions: it is adopted by 80% of the French. Indeed those who get married without signing a contract of marriage, come under, by default, this plan. The goods purchased during the marriage belong half to Sir and Madam and each spouse continues to own its own property inherited or acquired before marriage. Each spouse can administer independently of the other community property. It’s the principle of the concurrent administration. Excluding significant transactions (eg sale of property or businesses, mortgages ...) require the agreement of both. This is called co-management. When a debt is owed by one spouse, it commits the community property and separate property but not those of the spouse. Although it belongs to only one spouse, the family home can not have without the consent of the other spouse of the housing of the family. The marriage settlement is dissolved by the death of one spouse, the divorce, the judicial separation, and of course the change of marriage settlement. In case of dissolution, each gets back its own property and the half of the community property whatever his contribution.
• The regime of universal community: it’s about to merge the patrimonies of both spouses. Past, present and future heritage of one belong to the other and vice versa. The couple no longer has any personal property. However, it can be specified that the bequeathed or given property to one of the spouses are at the condition that it remain excluded from the community. This regime is often chosen by older people without children. The management of community property is identical to the one of the legal community. As this is one heritage, all debts are payable by the community. If one of the spouse dies, the survivor may inherit all property without paying inheritance tax (subject to having included a "clause granting the survivor" in the marriage contract). But children are disadvantaged; they will only inherit after the death of the second spouse. In case of divorce or judicial separation, the heritage is divided into 2 equal parts.
• The regime of matrimonial division of property: it lets everyone the property, enjoyment and free disposition of his property, except for family housing that can not be rented or sold without the consent of the other. There is no community property. All goods purchased by the spouses in their both names are jointly owned property and belong to the both spouses. As regards for debt, each spouse is responsible for its own property, without engaging the other one except the debts for the household maintenance, the education of children and tax liabilities. At the end of marriage the two assets remain separate. Therefore it is really necessary to separate them by not buying such with the joint account that is needed daily in the family.
• The regime for the participation of acquisitions: Founded in 1965, the regime of participation in acquisitions is little used because if at a theoretical point of view, it is relatively simple, its practical implementation is more complex. However, it is widespread in our German and Swiss neighbours because it is their legal system. This regime combines the advantages of matrimonial division of property during the marriage and of community after the marriage.
During the marriage, it’s the regime of the separation that applies. The couple is owner of property acquired before and during the marriage, as well as those they inherited. What gets measured later and Sharing is the enrichment of each one during the time of marriage. What is called the "counting of the debt of participation." If there is enrichment, it is shared equally between the both spouses.
The property management is on a regime of matrimonial division of property. At the dissolution, it applies the regime of legal community.
The spouses can change the marriage settlement during the marriage but after at least two years of implementation of the marriage settlement. Costs will be incurred, they depend on the size and nature of the property mentioned in the contract.
The PACS (contract of civil union) is a contract between two adults of opposite or same sex, to organize their life together: the partner in a PACS can choose between the joint ownership and the matrimonial division of property. In case of death, the survivor will have no right of the inheritance and the taxation is less attractive than for spouses.
A common-law marriage (or cohabitation) may be a situation of fact or of law. The courts consider that there is cohabitation when there is a stable and lasting relationship between two common-law people. The marital status of cohabitation only requires the partner who has contracted a loan. He only supports the debts. Nevertheless we must separate two situations, one where one partner takes out a loan for the acquisition of property and one where the two acquire the property in joint ownership.