Understanding Marital Economic Participation Regime: Phases, Agreements, and Liquidation Process Explained
The marital economic participation regime is the regime in which each of the spouses acquires the right to participate in the profits obtained by the other, during the time in which the aforementioned regime has been in force.
A matrimonial regime refers to the system of ownership and management of assets between spouses during marriage established by law or agreement. Common matrimonial regimes include separate property, community property, participation in acquisitions, and deferred community property. These determine how property acquired before and during marriage is classified and divided.
In this sense, the law also establishes that each of the spouses is responsible for the enjoyment, administration, and free disposal of the assets that belonged to them before marriage, as well as those generated or acquired after marriage.
What is the marriage participation regime?
In other words, the marital economic regime of participation is defined as one in which the spouses keep their corresponding assets separate while the regime remains in force, but once it is dissolved, each of them will be able to participate in the profits of the other.
In the participation regime, each of the spouses acquires the right to participate in the profits obtained by their spouse during the time in which said regime has been in force.
Once the extinction occurs, the profits will be determined by the differences between the initial and final assets of each spouse.
According to the above, the marital economic participation regime is composed of four phases, which we see below.
Phases of the Marital Economic Participation Regime
The preparation consists of the development of marriage agreements, understanding that it is the only way in which this regime can be agreed upon.
These capitulations can be made before the date of the marriage, but also after and they must always include the following aspects:
- The clear and precise definition of all the assets and rights that each of the spouses possesses before the constitution of the matrimonial property regime of participation.
- The percentage of participation of each spouse must also be defined based on the other’s earnings once the regime is dissolved. It is important to highlight that the percentage must always be the same for both partners, so a percentage greater or less than the other can never be established, even when the variation is minimal.
2. Regime surveillance
The next phase is regime surveillance. In this sense, once the regime is agreed upon, each of the spouses, as long as the marriage is not dissolved, must enjoy and manage their assets, taking into account that they are the owners of all the assets or rights that belong to them at the time of the constitution of the regime.
He is also the owner of the assets or rights that he acquires during the duration of the regime, regardless of the title.
In addition to the above, it is important to highlight that if the spouses acquire an asset jointly during the regime, it belongs to them according to what is established in ordinary pro diviso.
Likewise, it must be considered that each of the spouses must respond individually to the debts without compromising, at any time, the assets of the other spouse. Hence, this phase of regime surveillance is reminiscent, to a certain extent, of the traditional separation of assets.
3. Dissolution and liquidation
The third phase of the regime is the dissolution and liquidation process. This step occurs when the regime ends, which can occur for two possible reasons: divorce of the couple or desire to change the marriage agreements.
In either case, each of the spouses must participate in the other’s profits in the regime agreed upon from the beginning and as long as there are benefits.
On the other hand, for the dissolution and liquidation process, the initial assets must be considered, both the rights and assets that belonged at the time of creating the regime and all those acquired after that date, even those that have been acquired in a personal capacity. such as legacies, inheritances, and donations.
To do this, it will be necessary to deduct the debts of each of the spouses to subsequently determine the inheritance burdens, as long as they do not exceed the assets donated or inherited.
Likewise, it is important to highlight that for the initial assets, the value of the assets must be considered at the time they were acquired or, failing that, from the moment the corresponding economic regime began.
If there are no profits on the part of one of the spouses or there is also a situation of alienation of assets, the affected spouse has the possibility of filing a challenge. It is also a valid option for fraud situations within the duration of the regime.
4. Award and payment
Finally, the fourth phase of this type of matrimonial property regime is the adjudication and payment. To do this, first, the settlements of the regime must be made, as well as defining the earnings of each spouse.
Subsequently, the payment of those profits must also be made following certain specific steps, among which the following stand out:
- Payment will always be in money and will be made immediately:
- This means that payment can never be made, for example, by delivering an asset such as a vehicle or a home, it must always be in cash.
- The payment must be made immediately, but in the event of financial difficulties, the person has a maximum of three years to pay. In these cases, it is possible to agree on a postponement.
- If payment cannot be made with money and always with the authorization of a Judge or by mutual agreement between the spouses, payment may be made through the awarding of certain specific assets. From this, it follows that, although the general rule and the most recommended is to make the payment with money, it is possible to do so in this way, although mutual agreement between the parties or judicial authorization is essential for this.
This type of regime, although it is not as well known as others, is one more option available to spouses who get married. In general, this is a considerably fair regime, especially when there is a significant difference between the two estates.
It must be considered that at the time of liquidation, it is much easier and faster compared to the community property regime, especially in real estate.
Of course, it is essential to carry out this type of regime with the help of a lawyer specialized in the area, to ensure compliance with all the requirements.
1.What are the stages of marital status?
The typical stages of marital status include: single, engaged, married, separated, divorced, and widowed. These represent the different legal statuses a person can have in relation to marriage over their lifetime.
2.What is the marital property regime in the United States?
In the United States, there are two main marital property regimes: common law (separate property) in most states, and community property in a few states, which determine how assets and debts are divided between spouses during marriage and divorce.
3.What is the concept of the economics of marriage?
The economics of marriage refers to the study of marriage decisions, household behavior, and resource allocation within marriage through the lens of economic principles like rational choice, game theory, and models of supply and demand.
4.What are the economic reasons for marriage?
Economic reasons for marriage include pooling income and resources, specialization of labor, economies of scale, taxation benefits, inheritance rights, and receiving government assistance based on marital status. Marriage creates economic advantages for both spouses.