How assets are divided in a divorce in Spain

Divorce is not an easy process for many reasons. When it happens, there are many loose ends to tie up. From child custody and guardianship to the use of the family home, not to mention the division of the couple's joint assets. That is why we want to explain in as much detail as possible how to calculate the distribution of assets in a divorce.

What type of divorce are we dealing with?

The type of divorce that the couple chooses will have a significant impact on how easily and quickly their assets can be divided. In this regard, there are two options.

Divorce by mutual consent

As is usually the case, reaching an agreement on the divorce greatly speeds up the process. This also applies to the division of joint assets. In these cases, you and your former partner will decide how to proceed. Your decision will be reflected in the regulatory agreement.

Contested divorce

If there is no agreement, things become more complicated, as a judge will have to decide. This means that the process is much slower, more expensive and emotionally draining, but that's not all.

In contested divorces, the judge in charge will order an inventory to be made detailing all assets (property, such as homes, premises and savings) and liabilities (debts, such as mortgage loans or any shared credit). They will then order the settlement in accordance with the matrimonial property regime, which brings us to the next point

The matrimonial property regime

In most of Spain, with some exceptions such as Catalonia, the default matrimonial property regime is community property. However, anyone who wishes to do so may opt for the separate property regime, which has a clear impact on the distribution of assets in the event of divorce.

The distribution of assets under the community property regime

Community property includes all assets acquired by the couple during the marriage using money earned by either spouse. This includes, for example, real estate, investments, and money in bank accounts. Under the community property regime, all such assets must be divided equally at the time of divorce. In other words, each spouse is entitled to 50% of the assets.

The only exception is to the separate property, which is property that each spouse owned before the marriage. For example, if one of them acquired a home before getting married, it will not form part of the community property and will therefore be exempt from distribution.

The same applies to assets acquired through donation or inheritance, as it is understood that the right arose before the marriage. In other words, even if your parents die while the marriage is in force, the part of their estate that corresponds to you will not form part of the community property.

Distribution when there is separation of property

This economic regime is commonly summarised in the phrase: ‘what's yours is yours and what's mine is mine’. And, in truth, this is not without reason, as it greatly simplifies the distribution of assets in the event of divorce.

In this case, the former spouses not only keep for themselves the assets they acquired individually before the marriage, but also those they purchased afterwards. However, this does not apply if the assets are considered joint property because they were purchased jointly or in a specific percentage (60-40%, for example).

Furthermore, if separate property is chosen, the salaries earned by each member of the couple can go into a separate current account and not be divided during the divorce. In other words, assets that enter the family economy during the marriage are not considered to be the property of both parties.

Distribution when there is a participation regime

In Spain, this is very rare, but it is worth analysing. In this case, each member of the marriage has the right to administer their earnings separately and to manage the private assets they wish. However, in the event of divorce, the spouse who earned less will be entitled to a share of the other's earnings. This is done by means of a financial calculation that attempts to equalise the growth in assets of both spouses and to compensate, for example, those who give up part of their professional career to care for their children.

Debts and the family home: two different issues

Unsurprisingly, the family home and any debts incurred by the couple during the marriage are the factors that cause the most uncertainty among those going through a divorce. For this reason, we will devote a separate section to them.

The family home

If there are minor children, it is normal for the use of the family home to be assigned to the spouse who obtains custody of the minor children. The reason? Their interests will always be prioritised above all else. However, this does not affect ownership, which may remain shared unless a different agreement is reached.

If there are no minor children, the ownership and use of the family home will be subject to negotiation. However, it should be noted that, in the event of a contested divorce, the judge may give priority to the spouse who is most in need of protection, which is usually the one who is most disadvantaged financially.

The use of the family home also includes the use of everyday objects found inside it. For example, household goods, bedrooms, furniture, etc. Therefore, unlike jewellery, for example, these items cannot be divided up.

Debts

Debts or liabilities, such as mortgage loans or car loans, must also be settled when a divorce occurs. This is the case provided that they were incurred within the marital partnership under the community property regime. If they are private debts, they will only affect the person who incurred them.

Compensatory allowance

Some marriages, when dissolved, create a significant financial imbalance in favour of one of the spouses. Therefore, in order to rebalance their financial situation, judges may order the spouse who ends up in a better situation to pay a compensatory allowance. However, this is not the same as child support, which is granted to children.

The monthly amount and duration of the compensatory allowance will be determined by the judge based on the age, health and employment status of the beneficiary, as well as their dedication to the family during the marriage and the loss of professional opportunities that this entailed.

At this point, it is clear that the distribution of assets in a divorce in Spain can be quite complex. Therefore, it is always advisable to seek the advice of a lawyer who is an expert in divorce. Contact us for personalised advice.