Patrimony in law: What is it?

Patrimony is the capacity of a person to hold both assets and liabilities. Assets and Liabilities can be
equal or there can be more assets than liabilities or more liabilities than assets.
● Person refers to both a natural and a legal person

Malta follows the French version and tradition of patrimony, due to the prevalence of the French civil
code and it’s influence during the invasion of the French.
There include two versions and tradition, the german tradition and the french tradition.

The main characteristics of the french tradition include:

The Unity of Patrimony

The Indivisibility of a person’s Patrimony.

Unity of Patrimony:
● A person’s assets, present and future are the common guarantee of a person’s creditors. This
means, that if someone owes money to someone else, then that person is guaranteed to have to
take from the debtor.
● What a person owns, today or in the future, responds to liabilities, debts and obligations which a
person may contract now or in the future. A persons ownership is linked with their debts and
obligations in terms of owing money to your creditor.
● In a sense “everything has been put into one pot”
● This makes patrimony dynamic, as one could lose assets and have more liablities in one year, but
gain assets in three, due to being a creditor.

A creditor is a person who is owed something by the debtor, he who is debt. When it comes to
bankruptcy, there are two general tests.

● Liquidity test - Current assets divided by the current liabilities.

Depending on the context of the ratio of liabilities to assets, the person will either be at low risk or
high risk.

● Balance sheet test, where liabilities far exceed assets.

Indivisibility of Person’s patrimony.

There cannot in any circumstance be a segregation of assets and liabilities in patrimony. All eggs must
be in the same basket, all assets must be at the discretion of the creditor. In fact, in the case of a
business debt, members of said business or legal person, run the risk of said business debts affecting
their personal unconnected assets.

Important exceptions to Patrimony.

Succession and benefit of the inventory.

Upon one’s death, it is possible for the heir to accept a person’s inheritance with the benefit of
inventory. This privilege is only obtained by the heir to be liable for the charges and debts of the
successions. Upon inheritance, the heir is the continuation of the deceased’s personality,
notwithstanding the debts and liabilities or assets that come with said death.

Essentially, the heir is only liable to pay the deceased’s creditors the amount of assets left to them.

Putting it into an example, if an estate is valued at 100,000 and the estate is burdened with a debt of
120,000 then the heir will only be liable to pay creditors 100,000.
The exception of a ship/vessel
A ship/vessel has for purposes of creditors related only to the ship, a segregated asset, separate from
the other eggs in the basket.
Creditors furnishing (supplying, etc)
Those liabilities which are specifically attached to the ship, have preferential ranking over proceeds of
the ship.

So here, we see patrimony is NOT indivisible.

A trust.

A trust is a relationship between parties where a trustor gives another party who is known as a trustee
the right to hold title to assets for the benefit of a third party. Trustor owns the assets, but the trustee
holds the true patrimony over the assets. This is why it is an exception as there is no unity of
patrimony.

Laws referencing patrimony:

Articles 1994-1995, chapter 16 of the civil code

1995 (1) - property of a debtor is the common guarantee of his creditors all of whom have equal rights
over his property
1994 - whosoever has bound himself personally is obligated to fulfil his obligations which all his
property, past present and future.

Article 2095F-2095I talk about how property is transferred through security.