How to Agree on a Marital Property Regime to Protect Both Parties? A Complete Analysis of 3 Systems

After registering a marriage and officially becoming spouses, how should property be managed? Although money matters can strain relationships, having a rational discussion and agreeing on a marital property system before marriage can help protect both parties’ property rights afterward. In this article, we introduce the three current legal marital property systems, explore their characteristics, and help you find the best approach for managing finances with your partner.

Table of Contents

What Is a Marital Property Regime? Legal Protection for Spousal Property

A marital property regime outlines how a couple manages and uses property during their marriage, and how assets are divided if the marriage ends or one party passes away. It is also a key point of negotiation in many divorce cases.

What Types of Marital Property Regimes Exist? Overview of 3 Systems

Currently, marital property systems are divided into the legal property regime and contractual property regimes. The latter includes the community property system and the separate property system. By default, if no declaration is made, the legal property regime is applied upon marriage registration. The three systems are described below:

  • Legal Property Regime

    This is the default system upon registering a marriage. According to Civil Code Article 1005: "If the spouses have not entered into a contractual marital property agreement, the legal property regime shall apply." According to Civil Code Article 1017, property is divided into:

    • Premarital property: Assets acquired before marriage, managed individually.
    • Postmarital property: Assets acquired after marriage, managed jointly.
  • Community Property System

    Under Civil Code Article 1031, all property and income are merged into joint ownership, except for:

    • Property used exclusively by one spouse.
    • Items needed for individual professions.
    • Gifts received with written declaration stating they are separate property.
  • Separate Property System

    Derived from Civil Code Article 1044, this system allows each spouse to retain, manage, and dispose of their own property individually. This system helps avoid disputes during divorce, especially when there is a large wealth gap between spouses—as seen in the case of Foxconn Chairman Terry Gou and his second wife.

Comparison of the Three Property Regimes

  Legal Property Community Property Separate Property
Regime System System
Category Automatically applies Must be registered Must be registered
Default Status

◆ Pre-marital Property:
– Property individually acquired by each spouse before the marriage.
– If the couple originally adopted a contractual property regime but later switched to the statutory property regime, any property registered under one spouse’s name prior to the change is considered pre-marital property.

◆ Post-marital Property:
– Property acquired after the marriage.
– If it cannot be proven to be pre-marital property, it is presumed to be post-marital property.
– If ownership cannot be proven for either spouse, it is presumed to be jointly owned.

◆ Community Property:
– Except for separate property, all assets and income of both spouses are combined and regarded as community property.
– The couple may agree that only income derived from labor, such as salaries, bonuses, and other employment-related earnings, will be treated as community property.

◆ Separate Property:
– Items intended exclusively for personal use by either spouse.
– Items necessary for the professional occupation of either spouse.
– Gifts received by either spouse, which are declared in writing by the donor to be the recipient’s separate property.

◆ Separate Property of Spouses:
– Both pre-marital and post-marital property are individually owned by each spouse.

Ownership and Management Rights / Management Fee Responsibility Whether it is property acquired before or after marriage, it belongs to the person in whose name it is acquired or registered. If this cannot be proven, it is considered joint property, to be managed by both parties individually. Joint property is jointly owned; it can be managed jointly or one party may be designated to manage it.
Separate property is owned individually by each party; each party manages their own property. 		Manage individually or Each party manages their own.
Right to Use and Benefit / Right to Dispose Each party has the right to use and benefit from their own property; each party may dispose of their own property. Joint property is generally used and disposed of jointly, but it can be agreed that one party will manage it.
Separate property is used individually by each party. 		Each party may use and dispose of their own property.
Debt Repayment Responsibility Each party is responsible for their own debts. If one party repays a debt on behalf of the other, they may claim reimbursement from the other party. Debts related to joint property shall be repaid jointly by both parties. If one party uses their separate property to make payment in advance, they may claim compensation from the other party. Likewise, if joint property is used to repay a personal debt of one party, the other party may seek reimbursement. Each party is responsible for their own debts. If one party repays a debt on behalf of the other, they may request compensation from the other party.
Property Settlement Upon Termination of Relationship / Distribution of Remaining Property — The marital property, after deducting marital debts, shall be equally divided.
— Property acquired through inheritance or other gratuitous means shall not be included in the divisible property.
— If either party maliciously disposes of marital property before the termination of the legal marital relationship, the value of such property may be added back for calculation within five years.
— When marital property or premarital property is used to repay debts incurred before or after marriage, any uncompensated portion shall be included in the calculation of marital property or debts. 		— Upon termination of the relationship, each party may retrieve the property they owned at the time the joint property agreement was established, or the property specified by agreement.
— In the event of one party’s death, unless otherwise agreed upon regarding the amount, half of the remaining property shall belong to the surviving party.
Change of Marital Property Regime During the marriage, it is possible to change to a property regime by entering into a contractual agreement. Article 1010 of the Civil Code outlines several possible situations under which the property regime may be changed to a separate property regime. During the marriage, the property agreement can be revoked, or another type of property regime may be adopted.
If the original property agreement is revoked without adopting another one, the statutory property regime shall apply.

The table above briefly outlines the differences between the three property regimes. The most suitable model varies greatly for each couple or same-sex partnership. For example, when billionaire Terry Gou married his second wife, they opted for a separate property regime. It is important to carefully consider and discuss these matters before marriage.

The new marital property regime implements gender equality more effectively, outlining the differences compared to the old system.

On December 30, 2020, the Legislative Yuan passed the third reading of the amendment to the marital property regime. After the new system is implemented, it will better promote gender equality. Below is a summary of the differences between the new system and the old system:

Regime New regime Old regime
Legal Property Regime 1. Divided into premarital property and marital property.
2. Each party manages, uses, benefits from, disposes of, and settles their own debts.
3. Shared according to each spouse's financial capability. 		1. Divided into three types: original property, separate property, and joint property.
2. Joint property is managed by a designated individual, who has the right to use, benefit from, and assume responsibility for the debts.
3. If the husband is unable to support the household, the wife shall bear the full responsibility.
Community Property Regime 1. Both spouses jointly manage the community property.
2. Community property can only be disposed of with the consent of the other party.
3. In the event of divorce, property acquired before the contract is established shall be returned to each party, while property acquired after the contract is established shall be divided equally.
4. Shared according to each spouse's financial capability. 		1. The husband manages the community property.
2. In principle, the consent of the other party is required, but the property can be disposed of independently in necessary circumstances.
3. Both pre-contract and post-contract community property shall be divided equally.
4. If the community property is insufficient to support the household, the wife shall bear the full responsibility.
Separate Property Regime 1. Each party manages their own property.
2. Each party settles their own debts.
3. Unless otherwise specified by contract, each spouse contributes according to their own financial capability. 		1. In principle, each party manages their own property, but in exceptions, the wife may delegate property management to the husband.
2. Debtors are specified separately for each responsibility.
3. The husband may request the wife to bear the household living expenses.

From the table above, it is clear that the old system was unfair to women. Therefore, after the implementation of the new system, it can better protect women's property rights and interests.

Which current marital property regime provides the best property division for women in the event of divorce?

Each of the three property regimes has its own advantages and disadvantages. A full-time housewife and a woman who becomes a high-level executive have different considerations, making it difficult to say which regime is better in the event of divorce. A housewife who wants a divorce may worry about not having the financial means, while a working woman who earns more may be concerned about whether her property will be divided. Both men and women face the same issues. There have even been cases where a female celebrity married into a wealthy family, and when they divorced, her husband, having no property in his name, demanded half of the celebrity’s property. This highlights the importance of doing thorough research before marriage, to avoid being at a disadvantage in the end.

Which System Offers Best Debt Protection for Women?

Compared to the separate property system, both the legal and community systems require debt deduction before distribution, which may not always favor one side. However, property regimes can be changed during marriage with mutual consent. Under Civil Code Article 1010, a spouse may petition the court to enforce a switch to a separate property regime under the following circumstances:

  • Failing to contribute to household expenses.
  • Insolvency.
  • Unreasonably refusing consent for asset disposal.
  • Mismanaging joint assets.
  • Risking the other spouse’s asset claims through unjust enrichment.
  • Other significant reasons.

During divorce proceedings, both sides aim to avoid losses. Rational discussion and planning are critical both before marriage and during divorce to avoid losing both love and assets.

Need Help Deciding on a Marital Property Regime? Consult a Detective Agency for Legal Advice

Agreeing on a property regime before marriage ensures protection for both parties. If you are unsure which system to choose, feel free to consult with Yitong Detective Agency for legal advice. They offer not just investigation services but also have legal experts to help resolve complex legal issues.

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