Joint Estate

What it is

“Legal community” is the matrimonial property regime under which goods acquired during the marriage are the joint property of both spouses, even if only one of them purchased the asset. Disposal of common property requires the consent of both partners.

How it is established

In the absence of a different choice by the spouses, it is established by law at the time of marriage. The regime of “community” is established automatically at the time of purchase of an asset (so-called “immediate community”).

The joint estate (or legal community) may concern:

• purchases made by the spouses together or separately during the marriage;
• companies managed by both spouses and set up after the marriage;
• profits and expansion of companies run by both spouses and set up before the marriage.

When, however, the regime of community of property only affects the assets remaining at the time of the dissolution of legal community, the term used is “de residuo community” and can include:

• proceeds of the individual assets of each spouse;
• income from the separate activities of each spouse;
• companies managed by only one of the spouses and set up after the marriage;
• expansion of companies run by only one of the spouses and set up before the marriage.

Then there are the personal assets that are and remain the exclusive property of each spouse, that is:

• the property each spouse owned before the marriage;
• assets purchased after the marriage as a result of gifts or inheritance;
• goods for the personal use of each spouse;
• items used in the practice of the spouse’s profession;
• assets received as compensation for damages or loss of earning capacity;
• assets purchased with the proceeds of the transfer of personal property or its exchange. In this case, personal property can be replaced with other items that do not fall under community, but the following requirements must be met:
  • the purchasing spouse must make an appropriate statement in the purchase contract;
  • if the purchase relates to real estate or registered movable assets, the other spouse must also sign the purchase.

Administration of the common assets is up to the couple, who exercise it in different ways depending on the importance of the transaction.

Specifically:

• ordinary administration can be carried out separately by each spouse;
• extraordinary administration must be carried out jointly by both spouses.

Creditors

Another important aspect concerns liability for any debts.

The common assets are directly responsible for:

• debts incurred on them at the time of purchase;
• debts incurred by the spouses separately, in the interests of the family;
• debts incurred by the spouses jointly.

The common assets are only secondarily responsible for:

• debts incurred by the spouses separately, for reasons other than the interests of the family.

Secondary liability means that creditors must be paid first of all from the personal property of their debtor spouse: but if that is insufficient, they may also lay claim to the common assets, to the amount corresponding to the balance owed by the debtor spouse.

Termination

Dissolution of the joint estate occurs for the following reasons:

• death of either spouse;
• bankruptcy of one of the spouses;
• annulment, dissolution or termination of the civil effects of the marriage;
• personal separation;
• choice of separation of property, by special agreement.