In France, marriage has a direct impact on how spouses own their assets. Married couples can choose the way they will own their assets together. This applies to assets owned at the time of marriage and those acquired at a later date. This is known as a matrimonial property regime and will impact the way the property will be dealt with upon death of one of the spouses or following divorce.
The types of French matrimonial regimes available are:
The separation regime (which a notaire will apply to a couple married in the UK). Any assets owned by the spouses before and during the marriage are managed as each sees fit. The only exception is the family home, which may not be sold unless both spouses agree, even if only one of the spouses is the owner. This matrimonial regime differentiates between what each spouse owns on the day of marriage and any property, assets, investments and income acquired by each spouse during their marriage.
The universal community of assets (communauté universelle). All assets owned by the spouses on the day of marriage, as well as the assets they may acquire or receive by way of inheritance or gift during the marriage, become shared property.
The legal community of assets regime (communauté légale réduite aux acquêts). If the spouses do not opt by contract for any other kind of marriage regime to apply, then by default all the assets they acquire during the marriage will be considered as shared property. Any assets acquired by a spouse before the marriage remains his or her own property.
The concept of matrimonial property regime is not known and not applicable in common law countries and Judges in England will divide spouses’ assets according to different criteria. This can create real issues in specific cross-border scenarios, as the authority who will have to divide the couple’s assets could have to apply foreign laws and concepts.
Indeed, according to Private International Law, the law applicable to a married couple’s property regime will depend on the date of the wedding.
If a couple married prior to 1 September 1992, the law applicable to their matrimonial property regime is in principle determined by the location of their first matrimonial domicile. The law thus designated governs all property relations between spouses, regardless of where their assets are located and throughout the duration of the marriage, even if the spouses move or settle to another State.
For couples married between 1 September 1992 and 29 January 2019, the Hague Convention of 14 March 1978 provides that where the spouses have not specified any choice prior to the marriage, the applicable law is in principle the law of their habitual residence. However, the Hague Convention also provides that the applicable law automatically changes when:
- that habitual residence is established in the State in which the spouses have their common nationality, or otherwise from the moment they become nationals of that State, or
- after the marriage, that habitual residence has endured for a period of not less than ten years, or
- that habitual residence is established, in cases when the couple did not have a common habitual residence when they got married.
For spouses married after 29 January 2019, the new EU Regulation 2016/1103 creates the possibility to choose between:
- the law of the State in which at least one of the spouses or future spouses is habitually resident at the time of the agreement; or
- the law of a State of nationality of either spouse or future spouse at the time the agreement is concluded.
The law of a State that is a third party to the Regulation, such as the UK, can still be applied in the courts of other countries party to the Regulation, such as France.
In the absence of any prior agreement on the applicable law, the Regulation provides certainty as the applicable law to the matrimonial regime shall be that of the State of the spouses’ first common habitual residence after the conclusion of the marriage or, failing that, of the spouses’ common nationality at the time of the conclusion of the marriage. Should no common nationality exist between the spouses, the Regulation takes into account the potential for marriages involving spouses of different nationalities and provides that the applicable law is that of the State with which the spouses jointly have the closest connection at the conclusion of the marriage.
The determination of the applicable law to matrimonial property regimes is crucial for “international couples” and it will determine the mechanism for dividing the couple’s assets in the event of a divorce or on death.
For instance, a French court or a French notaire could have to divide a couple’s assets according to English law. On the other hand, couples living in the UK could find that their choice of law could become irrelevant from the day their assets have to be divided.
The determination of the applicable law to matrimonial property regimes and the way each authority applies a concept foreign to their own jurisdiction could result in advantaging/disadvantaging a spouse, depending on which law applies.
Indeed, where Judges and notaires in France will use mathematical ways to divide the assets according to the choice of matrimonial regime, Judges in England will rely on fairness and will have a discretionary power to decide a distribution based on equity.
How can we help?
Our French law team has experience in providing specific legal advice on the applicable law to matrimonial property regimes and the way properties should be divided in cross-border divorces, as well as on death of habitual residents in France. We can also advise UK residents who could be subject to matrimonial property regimes due to their close connection to France or are planning to move to France.
