Understand matrimonial property regimes in Portugal, including the rules on debts, inheritance and waiver of forced heirship rights.

Matrimonial property regimes in Portugal are governed by Articles 1717 et seq. of the Portuguese Civil Code.

Before getting married, the future spouses may choose the property regime they wish to adopt for their married life.

In simple terms, the matrimonial property regime is the set of rules that determines who owns the couple’s assets, on what terms those assets are held, and how they may be liable for certain debts.

Portuguese law provides for three main property regimes:

1. Community of acquired property

Under the community of acquired property regime, each spouse keeps as their own the assets they already owned before the marriage.

Assets that either spouse receives after the marriage by inheritance or gift also remain their own property, as do assets acquired by virtue of a right that existed before the marriage.

On the other hand, assets acquired after the marriage that are not classified as separate property belong to both spouses.

These assets include, for example, the product of each spouse’s work and, as a rule, income generated by separate property. These are known as the couple’s common assets.

Therefore, under this regime, salaries received by each spouse do form part of the common assets. As regards bank accounts held in the name of only one spouse, the formal account holder is not, by itself, enough to determine that the money is separate property. What matters is the origin of the funds.

 

2. General community of property

Under the general community of property regime, the rule is broader: all assets, regardless of their origin or the time at which they were acquired, belong to both spouses.

This includes, in principle, assets each spouse already owned before the marriage, as well as assets they may acquire afterwards.

However, there are exceptions. The law provides that certain assets belong only to one spouse. This is the case, for example, with certain personal-use items, strictly personal rights, such as usufruct and rights of use or habitation, and assets gifted or left by will with a clause excluding them from the community.

Those assets are separate property, even though the chosen regime is general community of property.

Note: community property does not mean each spouse owns one half

Under community regimes, whether community of acquired property or general community of property, common assets are not truly held in a half-and-half proportion by each spouse, as is often assumed.

The common estate belongs to the couple as a patrimonial unit. The spouses do not hold a quota over each individual asset. They jointly hold a common estate.

This distinguishes matrimonial community property from co-ownership. It is also the essential factor that distinguishes these regimes from the separation of property regime.

 

3. Separation of property

Under the separation of property regime, each spouse keeps ownership of the assets they owned before the marriage and of the assets they acquire afterwards.

There is no common estate of the couple.

However, this does not prevent certain assets from being acquired by both spouses. In that case, both are owners, but not as a couple under a matrimonial community. They are co-owners, as any two unmarried people could be.

Therefore, the asset belongs to each of them in the proportion defined in the acquisition deed or, if nothing is stated, under the general rules of co-ownership.

 

And what about debts?

As regards debts, the general rule is simple: when debts are incurred by both spouses, by one spouse with the consent of the other, or to meet the ordinary expenses of family life, they may be the responsibility of both spouses.

Debts incurred for the common benefit of the couple may also be the responsibility of both spouses.

In that case, if there is a common estate, that estate will, in principle, be liable first.

However, there is an important difference when the debt arises from the economic activity of only one spouse.

Under the community of acquired property and general community of property regimes, debts incurred in the course of trade may be presumed to have been incurred for the common benefit of the couple, unless proven otherwise. This means that the other spouse may have to show that the debt did not benefit the couple. The problem is that, more often than not, the opportunity to do so only arises once enforcement proceedings are already under way.

Under the separation of property regime, the logic is different. Since there is no common estate, each spouse is, in principle, liable for their own debts. If the debt was incurred by both spouses, or if both assumed liability towards the creditor, the individual estate of each spouse is liable, including their respective share in assets they have acquired together. However, there is no common estate of the couple to be seized. There are only the separate assets of each spouse, under the applicable legal rules.

If there is an asset bought by both spouses, that asset is held in co-ownership. Therefore, where the debt belongs to only one spouse, only the share belonging to the debtor spouse may, in principle, be affected.

 

Practical example: mortgage loan secured by a mortgage

Imagine a mortgage loan taken out during the marriage to purchase the family home, secured by a mortgage over the property acquired.

Under the community of acquired property regime, if the house is bought during the marriage and the loan is taken out by both spouses, the house will, as a rule, be a common asset, as will the debt.

Under the general community of property regime, the solution will tend to be similar: the house forms part of the common estate and the debt assumed by both spouses is a common debt.

Under the separation of property regime, if both spouses sign the loan agreement, both are liable to the bank. However, the house belongs to each of them in the proportion defined in the deed. There is no matrimonial community, but rather co-ownership.

In any event, if there is a mortgage, the bank may enforce the mortgage over the property in the event of default.

In practice, the effects may appear similar. However, the legal structure is different.

For this reason, together with the spouse’s position as a forced heir, the rules on debts are perhaps one of the most relevant aspects when choosing a matrimonial property regime. The choice may directly affect the protection of each spouse’s assets.

 

Choosing the matrimonial property regime

As a rule, the future spouses choose the property regime they want for the marriage.

When they begin the preliminary marriage procedure, they may choose to enter into an antenuptial agreement and opt, for example, for the general community of property regime or the separation of property regime.

If they do not enter into an antenuptial agreement, the marriage will be subject to the default regime: community of acquired property.

Until 1967, the default regime was not community of acquired property, but general community of property.

An antenuptial agreement entails a separate fee, distinct from the fee due for the preliminary marriage procedure. For this reason, many future spouses end up not actively choosing a regime, but simply accepting the default regime provided by law.

It should also be noted that the future spouses may agree on a matrimonial property regime different from the standard regimes mentioned here, provided that they respect the legal limits. Those limits are, however, quite restrictive.

Once the regime has been chosen, the rule is immutability. In other words, in principle, the property regime cannot be changed after the marriage.

 

When does the law impose or limit the property regime?

It is true that, as a rule, the future spouses may choose the property regime they want.

However, there are situations in which the law imposes or limits that choice.

The law imposes the separation of property regime:

• Whenever one of the spouses, on the date of the marriage, has reached the age of 60;
• Whenever the marriage is celebrated without the prior preliminary marriage procedure, in the cases where the law allows this.

On the other hand, the law prevents the choice of the general community of property regime where either of the future spouses has children who are not common to both of them, even if those children are adults or emancipated.

 

Does the property regime also matter after death?

In the event of the death of one spouse, the surviving spouse was, until 31 August 2018, always a forced heir of the deceased.

The property regime chosen made no difference.

Even if the spouses had married under general community of property, community of acquired property or separation of property, the surviving spouse always retained the status of forced heir.

However, with Law No. 48/2018 of 14 August, it became possible, at the time of marriage and through an antenuptial agreement, for spouses to mutually waive their status as forced heirs.

 

What does the waiver of forced heirship rights involve?

This legislative amendment recognised the possibility for spouses to exclude the legally imposed status of forced heir.

For this waiver to be valid, certain general conditions must be met:

• the property regime must be separation of property;
• the waiver must be included in the antenuptial agreement;
• the waiver must be reciprocal, meaning that both spouses must waive their status as forced heir of the other.

In this way, the legislature sought to reinforce the patrimonial separation that characterises this regime, allowing that separation to produce effects even after death, if the spouses so wish.

Even so, the waiver does not prevent one spouse from benefiting the other by will or gift. Liberalities made between spouses who have waived their status as forced heirs are not, by law, treated as infringing the reserved share up to the value that would have been due to the surviving spouse if the waiver did not exist. Within that limit, the remaining forced heirs cannot request a reduction of the value on partition on the grounds that their reserved share has been infringed.

In other words, waiving forced heir status does not necessarily mean excluding any possibility of benefiting the other spouse in the event of death. It merely means that the spouses are not forced to do so by operation of law as a result of marriage under the separation of property regime.

In addition, the spouses may establish specific conditions for the waiver. For example, the spouses may provide that the waiver will only take effect if certain people are still alive at the date of death, or, conversely, that it will cease to have effect if those people have already died. These conditions do not have to be the same for both spouses.

 

And what about the family home?

Even where there has been a waiver of forced heirship rights, the law protects the surviving spouse in relation to the family home.

The surviving spouse may remain living in the family home for a period of five years, as holder of a real right of habitation and a right to use the household contents. The court may extend this period in certain circumstances.

However, this possibility does not apply if the surviving spouse owns another home in the same municipality as the family home. If the family home is located in the municipalities of Lisbon or Porto, the exclusion also covers ownership of another home in that municipality or in neighbouring municipalities.

If the surviving spouse is over 65 years old at the date of opening of the succession, the real right of habitation is lifelong.

Once the period during which the surviving spouse benefited from the right of habitation has ended, they may also have the right to remain in the property as a tenant, under general market conditions, and they benefit from a right of first refusal if the property is sold, for as long as they live there under any legal title.

 

A final note

In practice, the lack of this option often influenced the decision to marry, especially in second or subsequent marriages, or in families with different assets, children or estate planning concerns.

This is because the mere celebration of marriage, even under the separation of property regime, meant that the spouses would become forced heirs of each other.

Social developments and the greater patrimonial autonomy of spouses justify greater freedom in organising family life and in disposing of assets after death.

Even so, the Portuguese succession regime remains highly protective of close family members and, in many respects, restrictive of freedom to dispose of assets after death.

 

If you have doubts about which matrimonial property regime is best suited to your situation, contact us for a legal consultation.

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