by Dr Graziella Cricchiola – Junior Associate
This is the second part of the series discussing rules regulating Marriage. The first part can be read here.
As outlined in the first part of this series of articles, there are three types of regimes regulating marriages . community of acquests, separation of estate and community of residue under separate administration (CORSA).
This article will focus mainly on the separation of estates and community of residue under separate administration.
Separation of Estates
This is the second most common matrimonial regime. Under this matrimonial system, any property acquired by a spouse during the marriage would remain his and the other spouse would not have any rights and control over the property. In this manner, each spouse would have full control and administration over acquired property and no common regime would be operating the subsistence of the marriage. Any property bought conjointly would be owned by both spouses and administered by both spouses. Nevertheless, even the percentage of share of conjoint property may be different since there may be instances where one spouse would have more share than the other.
This matrimonial regime is favoured when spouses are involved in commercial activities since any debts incurred by a spouse would be only chargeable on the assets of the spouse incurring such debt. I such a case the other spouse would not make any good for any debts incurred by the other spouse even if such debts exceeds the other spouse.s assets. As outlined by the Civil Court, First Hall in the names, /Lombard Bank Malta plc vs. IV.s Co Ltd (gia Santa Group 72 Ltd) et, delivered on the 3rd of July 2003 where the debt is a paraphernal property to one spouse, it is only the spouse who has given rise to the said debt who can be sued in relation to it as neither the other spouse nor his or her property have any interest in it.
The spouses would also have complete separation of income . one family but economically two separate individuals. Naturally, the question arises, should there be a financial distinction between the spouses? Unlike the community of acquests where income acquired by each spouses are shared equally between them (regardless spouses. financial pool), in the case of separation of estate, the inactive spouse would be left with nothing.
Community of Residue under Separate Administration
This is the least popular matrimonial regime. Following the 1993 amendments to the Civil Code, the CORSA regime was introduced to cater for spouses who felt that the community of acquests has diluted their authority. In the past, given that the husbands used to be the sole breadwinner of the family, it was thought that this matrimonial regime would offer a better economic administration of property acquired during the marriage.
This matrimonial regime allows for spouses to have independent administration of property which each spouse has brought into such community even though such property belongs to the community. Whilst the property owned by either spouse before the marriage remains his/her property, any other property acquired during marriage by each of the spouses will be held and administered by the spouse by whom such acquisition is made, as would an exclusive owner. This may be distinguished with the community of acquests regime where any property acquired during marriage is managed and administered by both spouses.
Nonetheless the most distinguished feature of this matrimonial regime lies in the manner property is divided upon the termination of said regime/
First and foremost, upon termination, when computing the final residue of each spouse, it is important, although burdensome, to distinguish between paraphernal and community property.
In order the calculate the share of each spouse upon termination, the following calculation have to be made:
– The community funds used for paraphernal property have to be added
– The expenses used for the CORSA out of paraphernal property have to be subtracted
– Any outstanding liabilities of the community have to be subtracted
– Any outstanding liabilities of the paraphernal property have to be subtracted
Each estate has to carry out this calculation, resulting in a final sum, and the higher of the 2 final sums will share the extra amount with the other spouse to balance out the amounts.
All in all one has to bear in mind that each matrimonial regime has its effects, advantages and disadvantages and each and every regime is envisaged to safeguard spouses interest in different ways and to different degrees.