When a marriage comes to an end, one of the first questions is what happens to everything the couple has built up together: the house, the bills, the car, the savings. The division of assets causes so much tension, partly because most people go into it without knowing what the law says. <\/p>\n\n
What each spouse is entitled to depends on two factors: the matrimonial property regime under which they married, and whether the divorce is by mutual consent or contested. Understanding these two factors before entering into negotiations makes a significant difference to the position from which one approaches the process. <\/p>\n\n
The starting point is always the matrimonial property regime. Many couples have never checked this, because in Spain a default regime applies if no other has been agreed upon in a marriage contract drawn up before a notary. <\/p>\n\n
In most of Spain, the default matrimonial property regime is the community of property. The autonomous communities (Catalonia, the Balearic Islands, the Basque Country, Navarre, Aragon and Galicia) have their own legislation, and in several of them the default regime is the separation of property. If you are unsure which one applies to you, you can check with the notary before whom the marriage took place or at the Civil Registry. <\/p>\n\n
The economic system determines what is included in the distribution and how it is divided. In Spain, there are three: <\/p>\n\n
This is the most common matrimonial property regime in Spain. Under Article 1344 of the Civil Code, income and assets acquired during the marriage are held in common, regardless of who generated them. Upon the dissolution of the marriage, an inventory of assets and liabilities is drawn up, joint debts are settled, and the remaining assets are divided equally between the spouses. <\/p>\n\n
Separate property (property that each spouse owned before marriage, or received by inheritance or gift) is not included in this inventory and remains with its owner.<\/p>\n\n
Each spouse retains ownership of what belonged to them before the marriage and of everything they have acquired during it. Divorce does not give rise to a division of joint assets, unless there are assets purchased jointly, in which case they are divided in proportion to each spouse\u2019s contribution. <\/p>\n\n
Where one of the spouses has devoted their time to the home or to looking after the children, without any paid work or with very little paid work, they may be entitled to financial compensation.<\/p>\n\n
This is the least common form. It operates as a separation of property during the marriage, but when the regime ends, the spouse with the smaller estate is entitled to a share of the other spouse\u2019s net gains. It is calculated by comparing each spouse\u2019s estate at the start and end of the marriage. <\/p>\n\n
The following assets are classified as separate property and are therefore excluded from the division of assets, as set out in Article 1346 of the Civil Code:<\/p>\n\n
This applies even under the community of property regime. If there is any doubt as to whether a specific asset is separate property or community property, documentary evidence of the source of the funds is essential. <\/p>\n\n
The family home is the asset that causes the most conflict. A distinction must be made between ownership and the right of use, as the two do not always go hand in hand. <\/p>\n\n
Where there are minor children, the courts usually award the right to use the family home to the parent with custody, regardless of who is the registered owner. The spouse who moves out remains a co-owner, but cannot sell or dispose of the property without the other spouse\u2019s consent for as long as that right of use remains in force. <\/p>\n\n
If there are no minor children, the property is treated in the same way as any other jointly owned asset. The usual options are: <\/p>\n\n
Where there is an outstanding mortgage, an agreement between spouses is not binding on the bank. Both parties will continue to be liable for the debt to the financial institution unless a novation or subrogation of the loan is formalised. <\/p>\n\n
The division does not affect assets alone. Debts incurred during the marriage form part of the liabilities of the community of property and must be included in the inventory of assets and liabilities. <\/p>\n\n
The settlement agreement may specify who is responsible for each debt, but this binds the spouses to one another, not to the creditor. If the debt is in both their names and one of them stops making payments, the bank may seek payment from the other, even if the agreement states otherwise. That is why agreements regarding debts must also be formalised with the financial institutions, not just in court. <\/p>\n\n
Once it is clear what is to be divided, the procedure depends on whether or not the spouses reach an agreement.<\/p>\n\n
If an agreement is reached, the division of assets is set out in the settlement agreement, which is submitted alongside the application for divorce. The judge will approve it unless it is seriously detrimental to one of the parties or to the children. <\/p>\n\n
This process is quicker, cheaper and allows for bespoke solutions: postponing the sale of the property, arranging phased payments, and setting conditions that a judge would not be able to impose. If there are no minor children, the divorce can be finalised directly before a notary. <\/p>\n\n
If no agreement is reached, the winding up of the economic partnership is dealt with in separate legal proceedings. The judge draws up the inventory, supervises the valuation of the assets (with the assistance of experts if there are assets that are difficult to value) and decides on the allocation of the assets. <\/p>\n\n
It is a longer and more expensive process. Depending on the court\u2019s caseload and the complexity of the estate, it can take between one and two years. <\/p>\n\n
This is one of the most overlooked aspects and can lead to surprises if not taken into account before signing.<\/p>\n\n
As a general rule, the dissolution of community property with an equitable allocation does not generate Personal Income Tax (IRPF) liabilities, nor is it subject to municipal capital gains tax, as there is no transfer of assets. However, if the distribution is not proportional (if one spouse receives assets exceeding the 50% they are entitled to), that difference may be considered an excess allocation and taxed as a capital gain. <\/p>\n\n
The primary residence receives special treatment, and its allocation within the framework of the dissolution of community property is usually exempt from Personal Income Tax, but every situation has its nuances. It is advisable to analyze the tax consequences before closing any agreement: what seems advantageous during negotiations may prove costly in the following year's tax return. <\/p>\n\n
Each spouse is entitled to 50% of the community property\u2014that is, assets acquired during the marriage. Separate property, acquired before the marriage or received through inheritance or donation, is excluded from the division and remains with the original owner. <\/p>\n\n
The use of the family home is usually granted to the custodial parent when there are minor children, even if they are not the owner. This does not imply a transfer of ownership: it only grants the right to use it as long as the children are minors or financially dependent on that family unit. <\/p>\n\n
Under a community property regime, balances accumulated during the marriage are community assets and are divided 50\/50. Funds deposited before the marriage or originating from inheritances may be considered separate property if their origin can be proven. <\/p>\n\n
In an uncontested divorce where the division is included in the regulatory agreement, the process can be resolved within a few months. In contested proceedings, the liquidation may take one or two years. <\/p>\n\n
Hiding assets during liquidation can have serious legal consequences. The other spouse may request asset investigation measures, and assets discovered later can be claimed in a separate proceeding. Documenting assets in advance is one of the most useful measures when a conflictive process is anticipated.
Legal references: Spanish Civil Code, Articles 1344 and 1346; Law 15\/2005, of July 8, amending the Civil Code and the Civil Procedure Law regarding separation and divorce.
When a marriage comes to an end, one of the first questions is what happens to everything the couple has built up together: the house, the bills, the car, the savings. The division of assets causes so much tension, partly because most people go into it without knowing what the law says. What each spouse […]<\/p>\n","protected":false},"author":3,"featured_media":713,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[118],"tags":[],"class_list":["post-714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-law"],"_links":{"self":[{"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/posts\/714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/comments?post=714"}],"version-history":[{"count":1,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/posts\/714\/revisions"}],"predecessor-version":[{"id":715,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/posts\/714\/revisions\/715"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/media\/713"}],"wp:attachment":[{"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/media?parent=714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/categories?post=714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ruthlopezmorueco.com\/en\/wp-json\/wp\/v2\/tags?post=714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}