Understand matrimonial regimes and their impact on wealth management
When we work with our clients on the organization and management of their wealth, we begin very often by reminding them of the importance of their matrimonial regime.
Community reduced to acquisition, universal community or separation of property? It is difficult to understand the nuances between all these contracts and the impact they will have on the couple’s assets at the time of dissolution, whether by death or in the event of divorce.
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To help you see more clearly, we present the main axes of the different matrimonial regimes in a series of 4 articles. In the 2nd article of this series, we will return to the community regime universal.
What is the universal community regime?
In this paragraph, we explain the nature and risks of this matrimonial regime.
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Under the regime of the universal community, the property owned by the spouses on the day of marriage, and those that will be acquired or received thereafter, form a single common mass.
Since each of the assets and liabilities are common, this scheme will be discouraged if one of the spouses has an entrepreneurial activity since the entire assets could be committed to potential creditors.
other hand, it is a very good protection for the spouse with little wealth; he will receive half of his spouse’s property, or even all if a full allocation clause has been planned.
In this case, on the first death, all the common property will be returned to the survivor. This clause is suitable for those who are anxious to maintain their lifestyle upon the death of the spouse, or with a modest wealth.
On the other hand, it is penalizing for children who will inherit only upon the death of the second parent, and who will be entitled to only one tax allowance (instead of one per parent).
An alternative to this full allocation exists to protect the spouse without injuring the children: to provide a precipitate clause that allows the removal of only certain property, either in full ownership or in usufruct, so that the spouse can select the assets he retains.
Find all the articles in the series:
- Article #1: What is the community reduced to gains?
- Article #3: What is the Matrimonial Regime of Separation of Property?
- Article #4: What is the Equity Participation Plan?