When a divorce occurs, one of the major issues for the spouses concerns the division of property.
This process varies considerably depending on the matrimonial regime adopted by the spouses, whether it’s a regime of community or separation of property.
This article offers a guide to understanding how property is divided in the event of divorce.
A) Community liquidation: general principles
1. Causes of community dissolution
Community property comes to an end for a number of reasons, including divorce.
Article 1441 of the French Civil Code lists the causes of dissolution of community property, including death, legal separation or change of matrimonial regime.
2. The liquidation process
Once the community has been dissolved, the following steps are necessary:
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- Identification of common and private property: Common property is that acquired during the marriage, while private property includes that owned before the marriage or received by gift or inheritance. Article 1467 of the French Civil Code stipulates that each spouse takes back any assets that were not part of the community.
- Forming the partitionable estate: This stage consists of inventorying and valuing the community property. The value of the assets must be fixed on the day closest to the date of partition, unless the spouses agree otherwise.
- Distribution of assets: Assets are distributed in accordance with the rules of liquidation, and each spouse may be awarded assets in return for financial compensation known as a « soulte ».
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3. Post-communal joint ownership
After the dissolution of the community, joint property may remain in joint ownership until its final division.
The fruits and revenues of this property then benefit all the joint owners.
One of the spouses may be appointed to manage this indivision. He or she will then be accountable for his or her management.
B) Division under the regime of separation as to property
1. Characteristics of the regime of separation as to property
Under this system, the spouses’ assets are separate.
Each spouse retains ownership of his or her personal property, whether acquired before or during the marriage.
2. Contribution to marriage expenses
Even under the regime of separation as to property, the spouses are obliged to contribute to the expenses of the marriage.
This obligation, laid down in Article 214 of the Civil Code, may give rise to adjustments at the time of liquidation to balance the financial contributions of each spouse.
3. Division of undivided property
If the spouses own joint property (such as a jointly acquired house), it must be shared.
The judge may intervene to settle disagreements or arrange for preferential allocation of property to one of the spouses, as is often the case for the family home.
C) Particularities of property division
1. Co-management rules
In the case of jointly-owned real estate, the principle of co-management applies.
The spouses must act jointly to sell the property, except in the case of forced sale.
2. Property valuation
The value of real estate is determined at the time of partition.
However, the spouses may agree on another valuation date, subject to the judge’s approval.
D) The notary’s role in liquidation and partition
1. Obligation of notarial intervention
Where the estate includes real estate, a notary is required to carry out the liquidation.
The notary draws up a liquidation statement, which serves as the basis for the division of the assets.
2. Dispute resolution
The notary can also play a key role in resolving disputes between the spouses, by drawing up a report on the difficulties encountered, which will be forwarded to the court for decision.
E) Rewards and debts between spouses
1. Definition of rewards
When an own or joint asset has benefited from an enrichment financed by the other asset (own or joint), a reward is due.
Article 1469 of the French Civil Code sets out the procedure for calculating these rewards, based on the lower of the two values between the initial expense and the remaining profit.
2. Allocation of debts
The spouses’ own and joint debts are equally divided at the time of liquidation.
Creditors may take action against both spouses, but recovery procedures vary according to the liability of each.
Conclusion
The division of property in the event of divorce is a crucial stage, requiring a detailed analysis of the respective assets of the spouses.
Whether under the community property regime or the separation of property regime, it is essential to respect the legal rules and to use the services of a notary to ensure that the liquidation and division operations run smoothly.
In the event of disagreement, the judge can intervene to settle the matter and ensure an equitable distribution of assets.