Jun 11 2021



Tags: community of property  ante-nuptial contract  pre-nuptial agreement 

Community of Property vs Prenuptial
Learn the difference between community of property and a prenuptial contract.

One of the biggest worries couples face when getting divorced is how the martial assets should be distributed between them. Often, one of the most difficult decisions is what happens to the family home and who gets to live in it. As is often the case, when there is no prenuptial agreement and a joint decision cannot be agreed upon, the property is sold and the profits are distributed equally between the 2 partners.

Some couples enter into marriage and don't give much thought to a prenuptial agreement. They assume that everything will go smoothly, however in the case of a divorce; they may find themselves having to go to court, to have the law decide the fate of their marriage assets.

Even if one spouse purchased the property before the marriage, that property may be considered to be a marriage asset, unless they entered into a prenuptial agreement before the marriage. If there is no prenuptial agreement in place, also referred to as an antenuptial contract, then that means that each spouse is legally entitled to the family home, even if only one of the spouse's names appears on the title deed.

In some countries, the most common form of marriage contract is called Community of Property. When a couple enters into marriage in 'community of property', it means that the marriage assets, including any properties acquired before or during the marriage are in a joined estate, including any debts or liabilities. In the event of a divorce, those marriage assets are usually split equally.

If the couple entered into a prenuptial contract before the marriage, then each spouse is able to retain their individual property and assets, in the event of a divorce. They can then freely decide whether or not their partner has any rights to their property, should they divorce.

The Outcomes of Living in Community of Property

It is important to note that what happens to the family home is dependent on many different factors and that no two cases are the same. Having said that, the most common outcomes of living in community of property are as follows:

1. Selling the Family Home

In many cases, it is agreed that the home is to be sold and the profits to be divided equally between each spouse.

2. One Partner Retains the Family Home

If there are children involved from the marriage, it is often agreed that the wife retains the family home until each child reaches the age of 18 years, after which the property is then to be sold.

3. One Partner Buys the Other Partner Out

One spouse remains in the home and buys the other partner out. This is often possible if one spouse has the financial income or earning capacity to do so, but often a new mortgage may be required.

4. One Partner Receives Assets of Equal Value

One spouse keeps the family home and the property is transferred into their name, while the other partner receives alternative assets of equal value to the family home.

You Settle Out of Court

If you and your spouse can mutually agree what happens to the martial assets and family home, then you can often settle without going to court. However, you should seek legal advice from a law expert and ask the court to make your agreement legally binding.

Letting the Court Decide

If you are married in community of property and unable to come to an agreement, the court will need to decide. Factors such as children, the spouse's ages, income and length of the marriage will all play an important part in the outcome.

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When a couple is married in 'community of property', it does not matter if the property was purchased before or during the marriage, or whose name appears on the title deed document. It means that each spouse has a legal right to the property or the value thereof. In the event of a divorce, the property's value should be split equally, unless there was a prenuptial agreement in place before the marriage or if one of the partners decides to buy the other out.

Related Article: How to Bequeath Property in Your Will


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