Reform of matrimonial property law: consequences for the family entrepreneur

At the end of 2017, the bill to reform the matrimonial property law was submitted to the Chamber. The bill contains a number of changes that will be important for entrepreneurs.

Marital regimes

At present, we know 3 marital regimes:

• the statutory regime, whereby the goods of the spouses are divided into three properties.  There are the personal properties of each of the spouses, including all the assets that the spouses possessed before the marriage and the assets they acquired during the marriage through an inheritance or legacy.  On top of that, there is the common property including all professional income and other income obtained during the marriage;
• the community regime, whereby the common property is conventionally extended;
• the separation of property regime, whereby each of the spouses retains his or her own property, without common property.

These marital regimes would be retained after the reform of the matrimonial property law.  However, the bill provides for a number of measures that aim for more justice and a better balance between professional practice and solidarity.

Distinction property right – asset value

Today, professional goods are own goods, even if they are purchased during the marriage with common funds.  Upon dissolution of the marriage, the entrepreneur can keep these goods but a compensation is due to the common property.  The current statutory regulations stipulate that this acquisition must take place at the initial purchase value.  Often, however, these professional goods will be of little or no value at the dissolution of the marriage.

The bill creates a way around this.  According to the new regime, the property right is always a private good of the entrepreneur but the economic value realized during the marriage is common.  In concrete terms, this means that the entrepreneur may retain the professional goods when dissolving the marriage, but he or she owes a compensation to the other spouse which is equal to the value of the professional goods upon dissolution of the marriage .

Hoarding professional income in a company

When spouses are married under the statutory regime,  professional income is in principle part of the common property.  If one of the spouses exercises his or her profession in a company of which the shares are their personal property, he or she could hoard the income in this company.  Upon dissolution of the marriage, the revenues accumulated in the company will remain private, notwithstanding they are actually professional income that should have been part of the common property.

The bill seeks to eliminate this unfair situation and provides for spouses who are married under the statutory regime that the spouse who hoards the professional income in the company that is part of his or her personal property will henceforth owe a compensation to the other spouse.

Solidarity in the separation of property

In the separation of property regime, there is no common property, but each of the spouses has his/her personal property.  Entrepreneurs often rely on this marital regime in order to protect the other spouse against professional creditors if something were to go wrong.

When the other spouse sets aside his or her career to take care of the family and the marriage is later dissolved, there is a risk that this spouse will be left almost empty-handed.

In order to embed more solidarity, the bill provides that (future) spouses will now be able to opt for a fourth, new statutory marital regime, namely the regime of separation of property with settlement of acquisitions.

In concrete terms, the spouses remain married under a genuine separation of property, but when the marriage contract is drawn up, it is agreed how many percent the other spouse can receive in case the marriage is dissolved.  The economically stronger spouse will then have to pay a sum of money to the economically weaker spouse upon dissolution of the marriage.

Entry into force

The law still has to go through the parliamentary process.  The aim is to bring the new regime into effect on 1 September 2018, together with the rules on the new inheritance law.

Frank De Langhe – Nicolas Lauwers

Published in “VOKA – Ondernemers Oost-Vlaanderen”, edition 2, February 2018.