Pre-nuptial contracts and matrimonial regimes

Filed under : Family Law

The concept of a “matrimonial regime” is one that is not familiar to people from the UK. In Spain and many other European countries when people marry, they either elect or decide on a matrimonial regime or, in default, the property after marriage becomes Community of property – known as gananciales. In the UK there is no fixed matrimonial regime and it has been likened in Spain to separation of assets. However, this can be very prejudicial if you have been married for a number of years and come to divorce.

It could mean that one party loses their rights over the family home or other assets. To prevent this happening you can elect a matrimonial regime by signing a pre-nuptial agreement OR by signing a notarial deed agreeing community of property after your marriage.

This can be very important for a number of reasons. One is on divorce when matrimonial assets may fail to be divided. Another is because of taxation – not only inheritance tax, but also other property taxes such as on transfers of property.

For example, in some cases a spouse may have purchased property in their sole name but now want to transfer 50% to their spouse. This can be done by agreeing to sign a Notarial deed establishing the marriage is now community of property. This transfer can then be done as a tax-exempt transfer. Whilst there are still legal, notarial and other costs associated with this transfer, the alternatives can be very costly.

In some cases, there may be inheritance tax issues, although in Andalucia the increase to a 1.000.000€ threshold has made this issue less important.

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