Navigating the Liquidation of Marital Assets in Divorce: Your Comprehensive Guide
One of the issues that we must take into account when considering a divorce is the liquidation of property .
Throughout this article we answer some questions that many people ask in relation to the topic at hand and we focus on the ways that exist to carry out the liquidation of the community property .
Frequently asked questions about property settlement
1. What is the community property?
Through the community property , the spouses pool the profits and benefits obtained by either of them during the marriage.
Now, they will not be marital:
- The assets belonging to each spouse before marriage or beginning the partnership.
- Assets acquired later free of charge (for example, an inheritance , donation).
- Those acquired at the expense or in replacement of private assets.
- Those acquired by right of withdrawal belonging to only one of the spouses.
- Assets inherent to the person or not transferable inter vivos.
- Compensation for damages inflicted on the person of one of the spouses or their private property.
- Clothing and objects for personal use that are not of extraordinary value.
- The instruments necessary for the exercise of the profession or trade, unless they are part of a common establishment or operation.
The community property regime can be stipulated before or during the marriage , through marriage agreements .
As a general rule, in the absence of capitulations, the marriage will be governed by the community property regime , according to our FAMILY Code.
In addition to the community property regime, there are two other types of matrimonial property regime : the property separation regime and the participation regime .
2. Are marital assets automatically distributed with the divorce decree?
No, the distribution of marital assets is not automatic .
It is wrong to think that the assets and debts of the marriage are automatically distributed with the divorce decree . For its distribution it is essential to initiate a property settlement procedure .
3. What effects does the divorce decree produce?
The divorce decree produces the dissolution of the marriage and the dissolution of the community property . But not its liquidation.
4. What does dissolution of the community property mean?
As of the divorce decree, the community property is dissolved, so that the assets and debts acquired from that moment on by each of the spouses will be private .
5. What happens to marital assets while they are not distributed?
During the period between the dissolution of the community property and the distribution of community property, a post-community society or community arises .
This company is no longer governed by the rules of the community property but by the rules that govern the ordinary community of property of the FAMILY Code.
6. When are the marital property shared?
The marital assets of the marriage are distributed at the same time that the liquidation of the marital regime is carried out .
7. When to carry out the liquidation of assets?
The liquidation of assets may be carried out at two different times:
- During the divorce .
- After the divorce.
8. How can the liquidation of assets be carried out?
The liquidation of assets can be carried out in two ways: by mutual agreement or in a contentious manner .
Next, we delve into the liquidation of assets, distinguishing whether it is mutual agreement or contentious.
Settlement of property in divorce by mutual agreement
During the divorce
There are two possibilities:
1) In the judicial divorce procedure by mutual agreement
Although the liquidation of property is not an essential content of the regulatory agreement , the spouses may include some stipulation on the liquidation of the property partnership .
The dissolution and liquidation of property, if there is mutual agreement between the spouses, will be approved by:
- Decree issued by the Lawyer of the Administration of Justice , when there are no minor or incapacitated children.
- Sentence issued by the Judge , in the case of minor or incapacitated children.
2) Divorce before a Notary
Only in the event that the spouses do not have minor children or whose capacity has been judicially modified , may they appear before a Notary to process their divorce.
Likewise, they may agree in the regulatory agreement on the liquidation of the community property . The public deed that formalizes the regulatory agreement will produce the dissolution of the community property and will approve the liquidation agreed upon by the spouses.
If the divorce is requested before the Lawyer of the Administration of Justice or before a Notary, as there are no minor or incapacitated children, the agreements adopted by the spouses must be reviewed .
If the Lawyer of the Administration of Justice or the Notary, where appropriate, consider that some of the agreements are detrimental to one of them or to the older children or emancipated minors, they will warn this and the procedure or file will be terminated. In this case, the approval of the regulatory agreement corresponds to the competent Judge.
After the divorce
Whether or not they have minor children , even if it is by mutual agreement, it is very common for spouses not to carry out the liquidation of property when requesting a divorce .
Well, once the community property is dissolved (by virtue of a judgment or judicial decree or public deed, if applicable), it will be enough to appear before a Notary to grant a deed of liquidation of the community property .
Let us not forget that, in both cases (during or after the divorce), there must be an agreement between the spouses , since otherwise only the competent Judge can approve the settlement. We deal with this case below.
Contentious liquidation of marital assets
If there is no agreement between the spouses on the liquidation of property, this must be carried out through a more expensive procedure regulated in our FAMILY Procedure Law : the procedure for the liquidation of the matrimonial property regime .
This procedure has two phases:
- Inventory formation phase : The assets and rights that make up the assets (property, land, money…) and the liabilities (loans and other debts of the community property) will be determined.
- Liquidation phase : Once the inventory is approved, the company’s debts will be paid. The remainder constitutes the assets of the community property, which will be awarded in half between the spouses.
Finally, indicate that it is totally possible to initiate this process at the same time as the divorce process . Once the divorce process has begun, either spouse can request the formation of an inventory.