What is and what is not part of the Matrimonial Property? What about prenuptial agreements? And how can the scope of the Matrimonial Property be adjusted during the marriage? We will answer these questions in this article.
What belongs to Matrimonial Property in the legal regime?
If the spouses (or the fiancés before marriage) do not modify the extent of their Matrimonial Property (SJM) in any way, everything acquired by one or both spouses together during the marriage becomes part of it. There are some exceptions. What does not become part of the Matrimonial Property:
- serves to personal needs of one of the spouses (e.g. clothes, toothbrush, journal, own cross-country skis).
- nabyl darem, děděním či odkazem jen jeden z manželů (např. byt po rodičích, obraz odkázaný babičkou).
- was awarded to one spouse as compensation for non-pecuniary damage to his or her natural rights. Natural rights include life, health, dignity, respect, honour, privacy. Example: a spouse is injured in a car accident, and the at-fault party - the plaintiff - gives him/her pain and suffering for the injuries sustained.
- was acquired by one of the spouses by a legal act relating to his/her sole ownership. Example: one spouse sells an apartment which he/she inherited - and which was therefore his/her sole property. The money spent on the flat is his sole property; if he buys a car with it, for example, the car will be his sole property.
- acquired by one of the spouses as compensation for damage, destruction or loss of their sole property. Example: a spouse rented to a third party an apartment which was his sole property. The tenant broke a window in the apartment and subsequently compensated the landlord in money for the damage caused. This money belongs exclusively to the landlord husband.
However, the community property includes profits from what belongs exclusively to one spouse. An example is again the use of an apartment - the exclusive property of one spouse. The husband rents out the apartment. The rent, after deducting expenses (e.g. taxes, repair costs), is the profit from the sole ownership - and this becomes part of the SJM. This is different from a situation where the husband sells the flat (see above). Shares in companies and cooperatives can also become part of the SJM if the husband became a shareholder during the marriage.
The SJM also includes debts incurred during the marriage. There are exceptions:
- If these debts concern the exclusive property of one of the spouses and exceed the profit from this property, then the part of the debt exceeding the profit from this property does not become part of the community property;
- One of the spouses assumed the debt without the consent of the other, and it was not a matter of providing for the daily or ordinary needs of the family.
An interesting situation, dealt with in case law, is when a husband borrows money without the consent of the other spouse. The amount of the loan is such that it is not to provide for the family's ordinary needs. With the money, the husband buys the family car. The car is part of the matrimonial property. The obligation of the husband to repay the money borrowed is not part of the SJM - this debt remains exclusively with the spouse who borrowed the money. In the event of a division of the SJM, the court may take into account this exclusive obligation of one spouse.
What is the usual way of disposing of the community property by the spouses?
The spouses dispose of the community property together, unless they agree otherwise. The spouses are jointly and severally entitled and obliged to act on the community property. In matters which are not ordinary, both spouses act jointly or one of them with the consent of the other. If the consent of the other spouse was required but not given, the act of one spouse is relatively invalid - the other spouse can invoke its invalidity. E.g. the husband wanted to buy a racing car and bought it with the funds in the SJM. The wife did not know about it. When she found out, she was very surprised because the husband had spent the money they had saved on renovating the apartment. She therefore sought out the seller and told him that the purchase price had been paid out of the couple's joint funds, that she had not given her consent to the conclusion of the purchase contract, and argued that the purchase contract was relatively void.
How can the scope of SJM be adjusted?
The Matrimonial Property may be adjusted in advance (before the marriage) by a prenuptial agreement or during the marriage by a so-called modification agreement.
Such a contract can prevent disputes between spouses or, for example, protect the family from the risk arising from one spouse's business. A prenuptial agreement may not only exclude certain assets "out" of the community of property, but may also extend the community of property to include, for example, assets acquired by the spouse before the marriage. So what kind of (pre-)marriage contracts can be concluded and what can be achieved?
- Separate property regime: this agreement can achieve that the SJM does not arise at all (or ceases to exist and is settled). The spouses then acquire assets and debts separately. If they buy the property together, they acquire it in ideal joint ownership - where each of them will own a share of the property.
- Extension of SJM: Spouses or fiancés can extend their SJM with certain types of things or with specific things. Thus, it can be agreed that real estate acquired before marriage by one of the spouses will be part of the SJM.
- Narrowing of SJM: It is equally possible to agree that certain things or resources will not be part of the SJM. Again, the narrowing may concern certain types of things (e.g. wages or profits from exclusive property) or specific things (an apartment that was previously part of the SJM will belong to only one spouse). The spouses must agree on who will own the thing or things to be divided. They can also agree that an item that should be acquired at some future date will not become part of the community property.
- Regime reserving the creation of the community of property on the date of dissolution of the marriage: the spouses may also agree to have "separate" property during the marriage and only on dissolution of the marriage (divorce, death of one of them) does the community of property arise - albeit "notional" and only for the purpose of its settlement. All assets and debts acquired during the marriage and qualifying for inclusion in the community of property under the statutory regime become part of the community of property at that moment. These assets shall be settled. What has been consumed or destroyed during the marriage is not taken into account.
Prenuptial/Modification Agreement
If the spouses or fiancés enter into a contract modifying the scope of the Matrimonial Property, they should also agree on how to dispose of the community property (or parts thereof). They may, for example, stipulate that one of the partners may act alone in relation to the joint property without the consent of the other spouse, as opposed to the statutory disposition regime.
Jak lze (před)manželskou smlouvu sepsat? Musí mít formu veřejné listiny – notářského zápisu. Pokud oba manželé či snoubenci souhlasí, lze smlouvu zveřejnit v Seznamu smluv o manželském majetkovém režimu. Smlouva tak bude přístupná komukoli, nikdo s manželi nebude moci jednat v dobré víře v to, že jejich SJM je v zákonném režimu. To se může hodit např. při exekuci vedené proti pouze jednomu manželovi. Soudní exekutor má povinnost zjišťovat a ověřovat si informace o (před)manželské smlouvě, a nemůže se tedy stát (resp. nemělo by se stát), že by postihl v exekuci majetek druhého manžela.
SJM under Court Decisions
SJM can also be reduced or dissolved by the court at the request of one of the spouses who has a compelling reason. This compelling reason may be, for example, the other spouse's prodigality; the other spouse's starting a business, becoming an unlimitedly liable partner in a legal person, or taking unreasonable risks consistently or repeatedly.
We are specialized in Family Law. Do not hesitate to contact us if you intend a property arrangement between spouses.
