Years ago, a woman about to get married asked me whether she should opt for a separate-property regime. Her future husband was a business owner, and my answer was an unequivocal yes.
She looked at me somewhat warily because — she explained — the priest who had led their premarital course had warned them that separate property was “the beginning of distrust.”
I do not remember exactly what I told her, but I do remember what I thought: “Let’s hope this marriage does not become a string of problems.” But it did.
Years later, that marriage ended in divorce, and she found herself facing a large share of her husband’s business debts. I do not know whether she sought the priest’s advice again, but one thing became abundantly clear to her: creditors do not care about love stories.
The anecdote has an ironic side, but it raises a rather serious question: why do we talk about love when we should be talking about financial risk?
What is striking is that, when we set out to start a company, we commission market studies, carefully assess the risks, negotiate the terms of shareholders’ agreements and try to tie up every loose end. Yet when we get married — a decision with financial consequences that can be as significant as those of any business transaction — we often limit ourselves to choosing the restaurant, the menu and the guest list. As for the marital property regime, we can talk about that another day.
It is worth remembering something that, basic as it may seem, is not always clear to us: where Aragonese law applies and no alternative arrangement has been agreed, the matrimonial property regime is the conjugal consortium.
And what does this legal term mean? Broadly speaking, much of what we acquire and generate during the marriage becomes part of a common estate, which may also be liable for certain financial obligations incurred by only one spouse.
Of course, there are many nuances. Assets owned before the marriage generally remain separate property, as do those received through inheritance or gift. However, employment income, returns on assets, and certain businesses or equity interests created or acquired during the marriage may form part of that common estate.
And this is where it becomes particularly relevant for business owners: the fact that company interests are registered in the name of only one spouse does not necessarily mean they belong exclusively to that spouse.
Consider a company incorporated during the marriage using joint funds. Even if only one spouse is listed as a shareholder, the interests may form part of the consortium estate. That does not automatically make the other spouse a shareholder or allow them to take part in managing the company, but it does mean that those interests and their value must be taken into account when the time comes to divorce and wind up the matrimonial property regime. And, of course, depending on the value the company has reached, this may be far from a minor issue.
But there is something even more important, which I mentioned earlier: debt.
Marriage does not automatically mean taking on half of the other person’s debts, but the family estate may be put at risk by business decisions in which one spouse has not even been involved.
By contrast, as a general rule and without going into detail, a separate-property regime allows each spouse to retain ownership and control of their own assets and remain liable for their own obligations.
So is it better to marry under a separate-property regime? Not necessarily. It will depend on each couple’s circumstances, their assets and the risks they undertake.
What is difficult to justify is spending weeks choosing the flowers for the altar and not even five minutes understanding the financial consequences of marriage.
Choosing separate property does not mean loving your partner any less. Just as signing a shareholders’ agreement does not mean distrusting your business partners. It is called planning. And it is usually far cheaper than sorting out the problems afterward.
There is no need to turn a wedding into a master’s course in law. But some questions are best asked before “I do,” rather than when “I don’t” comes around.
And what if we have already promised eternal love without thinking about any of this? Is there still time to change the rules of the game?
We will discuss that in the next installment.
To be continued…
