To have and to hold
Vincent Morand looks at the implications of matrimonial regimes on asset ownership when getting married in France
In the last issue we looked at the matrimonial regime – communaut� universelle avec clause d’attribution int�grale au conjoint survivant – as a way to protect the surviving spouse. In this issue we will consider the various French r�gimes matrimoniaux through a recent case we have come across.
Our client, an English woman resident in the UK, was planning to marry a French man living in France. The religious part of the ceremony was planned to take place in the UK while the civil part would take place in France at the town hall in the village where they were planning to live together immediately after the wedding. The fact that they were planning to do this means that their marriage was going to be subject to French law. While marriage in church (or most other places of worship) under English law does not require a separate civil ceremony, this is necessary in France.
How would French law treat such a marriage? This is a question that we had to consider with our client, and discuss what options would be available for her and her future husband in relation to how they would regulate their matrimonial property.
A r�gime matrimonial is the set of rules that govern how a married couple’s assets will be held. In France, unlike in the UK, there are several r�gimes matrimoniaux and the choice is made by signing a special deed known as contrat de mariage with a French notaire. If this contract is not signed before the marriage, the communaut� de biens r�duites aux acqu�ts is the default position.
Marriage without a contrat de mariageThere is an international convention, applicable in France, which sets the rules that apply to international marriages. According to this convention, if the couple have not made a specific choice of regime prior to their marriage, then the standard regime of the country where they have their first habitual residence after the marriage is applied. In the case of our client, they were going to live in France, so French law would apply and thus the spouses would be married under the communaut� de biens r�duites aux acqu�ts.
Marriage with a contrat de mariageEach r�gime has pros and cons and the type of contract you choose will depend on the personal situation of the future spouses.
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Communaut� de biens r�duites aux acqu�tsIn this r�gime, assets owned by each spouse before the marriage remain his or her own property (bien propre). Assets bought after the marriage are treated as joint assets. Income received by one spouse is treated as joint income and consequently debts are also generally treated as joint debts. If a property is purchased after the marriage, it is treated as a joint asset (bien commun) unless the spouse purchasing it can prove that he is using funds owned solely by him or her before the marriage or the purchase is funded by the sale of an asset treated as personal. Immoveable properties given to or received by inheritance after the marriage by one of the spouses remain personal to this spouse. To deal with joint assets (biens communs), in particular immoveable property, the spouses must be in agreement.
This r�gime matrimonial is not always a suitable one. One of the main features of the communaut� de biens r�duites aux acqu�ts is that in practice it may be difficult to separate personal assets from joint assets. It is not uncommon that during the marriage one spouse might use personal funds to, for example, carry out work on a joint asset, meaning that in the case of a divorce this spouse may be entitled to claim for a reimbursement, known as r�compense. Calculation of these r�compenses may prove very complex. On the other hand, even if only one of the spouses works, the other who does not contribute an income will still own half of the assets bought after the marriage. In case of a divorce joint assets and debts are equally divided between spouses.
S�paration de biensThe r�gime matrimonial of separation de biens is similar to the situation we would recognise in the UK, in that each spouse is treated as having separate shares in everything that they may own jointly, and that any asset owned in the name of one of them is personal to that one person. They are set out by articles 1536 to 1568 of the French Code civil. This r�gime matrimonial is often recommended by French notaires for clients running a business that has a risk of debt. The main idea is that what belongs to one spouse only belongs to him and vice-versa, whenever the assets were bought or received by him. It is, however, possible for the couple to buy assets equally in their joint names. Every time they want to purchase another asset, the spouses must decide whether or not they want this asset to be in their joint names. With the communaut� de biens r�duites aux acqu�ts the rule is different, as the principle is that all assets bought after the marriage will be joint unless the contrary can be proved.
With the s�paration de biens regime, when an immoveable property belongs to one spouse only, he can sell it alone without the other spouse’s authorisation unless this is the matrimonial home (r�sidence de la famille). In this case, the second spouse has to give his or her authorisation. It is, however, only an authorisation and the other spouse is not treated as the owner of the property and as such does not receive anything from the sale proceeds. This rule also applies with the communaut� de biens r�duites aux acqu�ts above when the r�sidence de la famille is a personal asset (bien propre) of one of the spouses. When a property belongs to both spouses they must be in agreement if they want to sell it.
Other r�gimes matrimoniauxThe communaut� de biens r�duites aux acqu�ts and the s�paration de biens are the two main French r�gimes matrimoniaux. There is also the participation aux acqu�ts, which is in practice less common. The main rule of the participation aux acqu�ts is that, at the end of the marriage, by death or divorce, the spouse whose assets have increased the most during the marriage has to pay a lump sum compensation to the one whose assets have increased the least. Finally there is the communaut� universelle. This is a r�gime matrimonial treating all assets as joint assets; debts are also treated as joint debts. Usually there is clause d’attribution int�grale de la communaut�, meaning that on the first death all the joint assets pass on to the surviving spouse and therefore the children do not inherit from the first to die. This can be an effective way to protect the surviving spouse but in practice it is usually not really advisable for newlyweds especially when debts may arise in the future.
R�gime primaireThere are rules that apply to any marriages subject to French law regardless of the r�gime matrimonial. These rules are known as r�gime primaire and are set out by articles 212 to 226 of the French Code civil. One of the main rules is that the spouses must contribute to the needs of the family, whether in a financial or a practical manner, as far as each of them is capable of so doing. In practice the partner earning the most must therefore contribute the most. Finally there are also cases where spouses, even those married under the s�paration de biens regime, are both responsible for the payment of particular debts. This may be the case for fiscal debts or for debts related to the family’s direct needs.
Deciding which of the various options is the most suitable is not easy and the choice mainly depends on personal views. Whatever the decision is, it is advisable to ask a French notaire to draft a deed – un contrat de mariage confirming it. Specialised advice should always be sought where cross border issues may arise.
Ashton Graham www.ashtongraham.co.uk/france