The purpose of this article is to provide information on the main characteristics of this legal institution, which enjoys certain tax advantages under the Inheritance and Gift Tax Act.
The mutual aid relationship is a form of cohabitation outside of marriage and stable unions, made up of relatives in a collateral line with no degree limit or by people united by bonds of friendship or company, who, without constituting a nuclear family, share a home and pool their domestic work, with a desire for mutual aid and permanence.
We highlight the most relevant aspects of the regulation of this situation of coexistence:
a) Constitution: Mutual aid relationships can be constituted (i) by public deed, from which they are fully effective, or (ii) by the course of a two-year period of cohabitation, but the minimum two-year period of cohabitation must be demonstrated by means of a notarial deed.
b) Personal requirements: It should be noted that the maximum number of cohabitants, if they are not relatives, is four. On the other hand, persons who are already married or are in a stable relationship with another person with whom they live are excluded from this type of cohabitation.
However, taking into account the purpose of the rule, there is no impediment for each of the members of the marriage or stable couple to be able to have a mutual aid relationship with a third party.
c) Agreements: Cohabitants may regulate personal and property relations, and the respective rights and duties during cohabitation, as long as these agreements do not harm third parties. And in anticipation of a rupture, the cohabitants can also agree on the effects of the extinction of such a relationship.
d) Extinction: Among the causes of the extinction of the mutual aid relationship, we highlight (i) the agreement of all the cohabitants, (ii) the unilateral will, (iii) the death of one of them, (iv) the causes that would have been agreed upon at the time of their constitution, (v) the marriage or the constitution of a stable couple.
However, if the cohabitation relationship has been established between more than two persons, then the unilateral will, the marriage, the constitution of a stable couple or the death of any of the co-habitants, will not extinguish the relationship if the others continue to live together, without prejudice to the modifications that are considered convenient to make in the agreements regulating the cohabitation.
The extinction of such a relationship also has consequences for example on:
- The dwelling, depending on whether the termination of the cohabitation takes place during the life of all the partners or on the death of one of them and depending on whether the partner is the owner or the tenant of the property.
- Powers of attorney, since the termination of the cohabitation relationship leaves without effect the powers of attorney that one of the cohabitants has granted in favor of any of the others.
Likewise, powers of attorney that one of the members has granted in favor of any of the others or has granted in his favor since he left the cohabitation are without effect.
- The right to a periodic pension in the event of the termination of cohabitation due to the death of one of the partners provided that the particular situations determined by law are met.
e) Tax advantage: In acquisitions due to death between members of a mutual aid cohabitation, the acquirers are assimilated to the group of relatives determined in the law on inheritance tax. This assimilation operates in specific cases, among others, for the purpose of applying the corresponding reductions for the acquisition of the habitual residence of the deceased.
In this article we have highlighted the main characteristics of this somewhat unknown legal institution. If you have any questions, you can use the contact area of our website to consult with our team of specialist lawyers. We will be happy to assist you.