Why do couples opt for Separation of Estates

In layman’s terms, separation of assets refers to a contract/agreement between couple members, who decide that the property and income remain separate, even after marriage takes place. This approach is less conventional in Maltese society, as we still associate marriage with a sense of strong commitment where both husband and wife share burdens and benefits equally.

Separation of assets is one of the three available matrimonial regimes, couples may opt to choose this approach before or during marriage. It is a regime which regulates the property between spouses during marriage.  This regime does not apply by default unlike the Community of Acquests, where this applies automatically once marriage takes place. In the Community of Acquests regime, the assets and liabilities belong to both spouses equally and are administered jointly.

In Separation of assets, any property acquired during marriage remains paraphernal property, meaning that the items or property acquired by each spouse before and  during marriage remains separate throughout, individually retaining full control and administration over the property they acquire, the other spouse has no right over it. By property, we mean anything belonging to the person, including furniture, vehicles bank accounts and companies.  

Benefits of Separation of Assets

Although most would rather avoid thinking about it, separations and divorces are a harsh reality which bring with them several problems, as to who will take what. A Separation of assets agreement highlights what belongs to who from the offset and there should be less problems in the eventuality of separation or divorce.

In certain contexts, this type of agreement may bring with it peace of mind. A wealthy or well-off individual may feel less secure about marriage because of the underlying fear that whoever is marrying him/her is doing so solely for the money. The Separation of assets regime is also particularly useful for business owners who are worried that they may lose half of their business if they end up in a messy divorce or separation. Another advantage of the Separation of Estates is that if a spouse enters into debt which cannot be paid, creditors have no legal right to turn to the other spouse. This is indeed a benefit as having to turn on the other spouse to pay off significant debt is enough to leave the entire family in a dire position.

How does one apply this regime?

In order for a Separation of assets agreement to take place, a couple needs to go before a Notary Public and draft a marriage contract which takes the form of a public deed. This public deed is then registered into the Public Registry.

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