What does the Reservation of Revenue & Fruits do?
In Louisiana, if you own property that’s considered solely yours—like something you owned before marriage or received as a gift—the money it earns (like rent or interest) is usually shared with your spouse. But, if you want to keep that income entirely yours, you can. Here’s how:
- Write It Down: Create a document saying you want to keep the income from your separate property as yours alone.
- Tell Your Spouse: Give your spouse a copy of this document before you make it official.
- File the Document:
- If it’s about real estate, file it in the parish where the property is.
- If it’s about other things like bank accounts, file it in the parish where you live.
Doing this ensures that the money your separate property makes stays yours and isn’t shared as community property.
In Louisiana, under the default community property regime, the fruits and revenues—such as interest, rents, and dividends—generated from a spouse’s separate property are typically classified as community property. However, Louisiana Civil Code Article 2339 provides a mechanism for a spouse to reserve these fruits and revenues as their separate property through a formal declaration.
Framework
According to Louisiana Civil Code Article 2339:
“The natural and civil fruits of the separate property of a spouse…are community property. Nevertheless, a spouse may reserve them as his separate property as provided in this Article.” Justia Law
Procedure for Reservation
To effectively reserve the fruits and revenues of separate property as separate, a spouse must:
- Execute a Declaration: The spouse must create a declaration stating the intent to reserve the fruits and revenues as separate property. This declaration can be made in one of two forms:
- An authentic act, which is a notarized document signed in the presence of a notary public and two witnesses.
- An act under private signature duly acknowledged, which is a document signed by the spouse and later acknowledged before a notary public.
- Provide Notice to the Other Spouse: Before filing the declaration, the spouse must deliver a copy to the other spouse, ensuring they are informed of the reservation.
- File for Registry:
- For immovable property (real estate), the declaration becomes effective when it is filed in the conveyance records of the parish where the property is located.
- For movable property (such as bank accounts or stocks), the declaration becomes effective when it is filed in the conveyance records of the parish where the declarant resides.
Implications
By completing these steps, the spouse ensures that the income generated from their separate property remains separate, preventing it from being classified as community property. This reservation can have significant implications, especially in scenarios involving divorce or the division of assets, as it delineates which assets belong solely to one spouse.
Note: This explanation is for informational purposes only and does not constitute legal advice. For specific legal concerns, consult with a qualified attorney.
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