Prenuptial agreement

A prenuptial agreement, antenuptial agreement, or premarital agreement, commonly abbreviated as prenup, is a contract entered into prior to marriage, civil union, or any agreement prior to the main agreement by the people intending to marry or contract with each other. The content of a prenuptial agreement can vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage. They may also include terms for the forfeiture of assets as a result of divorce on the grounds of adultery; further conditions of guardianship may be included as well. It should not be confused with the historic marriage settlement which was concerned not primarily with the effects of divorce but with the establishment and maintenance of dynastic families.

In some countries, including Belgium and the Netherlands, the prenuptial agreement not only provides for the event of a divorce, but also to protect some property during the marriage, for instance in case of a bankruptcy. Many countries, including Canada, France, Italy, and Germany, have matrimonial regimes, in addition to, or some cases, in lieu of prenuptial agreements.

Postnuptial agreements are similar to prenuptial agreements, except that they are entered into after a couple is married.[1] Historically (and sometimes still today) prenuptial agreements were called marriage contracts. Marriage itself is often viewed as a contract.

Laws vary between both states and countries in both how to draft them and in whether they will enforce such agreements.

Africa

South Africa

In South Africa, a civil marriage or civil union is, by default, a marriage in community of property. In order to marry out of community of property, the parties must sign an antenuptial contract in the presence of a notary public prior to their marriage and the contract must be registered in the Deeds Office within three months from the date of signature of the contract.

When marrying out of community, the parties have a choice to marry with application of the accrual system or without application of the accrual system.

In the event that the parties marry without accrual, the spouses’ respective estates would always remain separate and neither party will have any proprietary claim against the other by virtue of the marriage.

If the parties marry with application of the accrual, their respective estates would remain separate during the subsistence of the marriage. Upon dissolution of the marriage, whether by death or divorce, the spouse with the lesser accrual would have a claim against the spouse with the larger accrual for half the difference between their accrual values.

Eurasia

Asia

India

In India, prenuptial agreements are very rare and do not have any governing laws. However, with rising divorce rates people are showing increasing interest in them. Some lawyers are of the opinion that prenups don't have legal sanctity in India. However, some form of contract is signed in some cases, usually among affluent citizens. But, the agreements need to be reasonable and not violate pre-existing laws like the Hindu Marriage Act. Indian courts allow a memorandum of settlement to be signed during divorces. But, no court has yet been asked to enforce a prenup.[2]

These agreements may come under the Indian Contract Act 1872. The Section 10 of the Indian Contract Act states that agreements are to be considered contracts if they are made by the free consent of the parties.[3] However, the Section 23 of the same act states that a contract may be void if they are immoral or against public policy.[4]

Goa is the only Indian state where a prenuptial is legally enforceable, as it follows the Portuguese Civil Code, 1867. A prenuptial agreement may be signed between the two parties at the time of marriage, stating the regime of ownership. If a prenuptial has not been signed, then the marital property is simply divided equally between the husband and wife.[5][6]

Thailand

The prenuptial agreement in Thailand sign on the basis of mutual consent of the man and woman, which want to get married. Under Thai law, a prenuptial agreement is recognized by the Commercial and Civil Code of Thailand. A valid and enforceable Thai prenuptial agreement requires by Law where:

  • the content of the prenuptial made in Thailand cannot be against the law or good morals;
  • both the prospective husband and wife must understand the content of the prenuptial;
  • the prenuptial in Thailand must be made before the marriage, a contract between husband and wife concerning personal and jointly owned property made after the marriage registration (post-nuptial) is void;
  • both the future husband and wife must sign the prenuptial in the presence of at least 2 witnesses and the agreement must be entered into the Marriage Register together with the marriage[7]

These conditions are found at clause 1466 of the Commercial and Civil Code of Thailand.
In accordance with the laws on Thai marriage, the prenuptial agreement mainly relates to assets and financial implications of marriage and establishes conditions of ownership and management of personal and concrete joint property and potential division of marital assets, if the marriage will be dissolved. The prenuptial agreement also includes a list of each side's personal assets at the time of the marriage and guarantees, that debts and property before the marriage remain in possession of the initial owner or debtor.

Personal property includes:

  • property owned by spouses before the marriage;
  • property for personal use — work instruments, clothes, etc.;
  • gifts from third parties or property received through the testament (if it is not indicated in testament, that property should transfer to joint property of spouses);
  • “khongman” — real estate transmitted to the bride as a dowry (during the engagement ceremony).

Joint property includes:

  • property acquired at the time of the marriage;
  • property received by one of the spouses at the time of the marriage as a gift, if in the document attached to a gift or in the document compiled by spouse this property was declared as joint (Martial Assets);
  • income acquired from personal property.[8]

Europe

The Marriage Contract by Flemish artist Jan Josef Horemans the Younger c. 1768

Prenuptial agreements have long been recognized as valid in several European countries, such as France, Belgium, the Netherlands, Germany, Poland, Switzerland, Sweden, Denmark, Norway and Finland. While in some of these countries there are limits on what restrictions the courts will see as enforceable or valid (e.g. Germany after 2001, where appeals courts have indicated this), a written and properly initiated contract, freely agreed upon, cannot be challenged by, for instance, invoking the circumstances under which the marriage broke down or the conduct of either part. In France and Belgium (as in Quebec, which has the same judicial tradition) prenuptial agreements must be set up in the presence of a notary.

In many of the countries mentioned, prenuptials may also protect the non-shared property and money from being pulled into a bankruptcy and can serve to support lawsuits and settlements during the marriage (for instance if one part has sold or wrongfully mortgaged a piece of property that had been set aside by his/her partner).

Ukraine

In accordance with provisions of Section 10 of the Family Code of Ukraine, marriage relationships, rights and duties of spouses can be regulated by a Marriage contract as well if spouses wish to settle their property relations in other manner then it is provided by the Family Code of Ukraine.

Marriage (prenuptial) contract can be concluded by a woman and a man, who applied for registration of their marriage as well as by spouses. Underaged person, who wants to conclude a marriage contract before registration of the marriage, is to have a signed consent of his/her parent or custodian certified by a notary.

Numerous provisions of this section of the Family Code of Ukraine provide quite extensive requirements as regarding the form and contents of the marriage contract and the procedural issues of making the same are regulated by appropriate Instruction of the Ministry of Justice of Ukraine as regarding the procedure of notarization of marriage contracts as well as far as notarization is required.

Imperative requirements as regarding content of the marriage contract are provided by clause 93 of the Family Code of Ukraine, which states that the marriage contract governs property relations between spouses, determines their property rights and duties. Marriage contract can also determine property rights and duties of spouses as parents, but with certain limitations. Personal relations of spouses cannot be regulated by the marriage contract, as well as personal relations between spouses and their children. This rule is also provided by clause 93 of the Family Code of Ukraine. Marriage contract, which reduce rights of children and put one of spouses on a poor material state, are not permitted by the above imperative regulation. Within the frameworks of the marriage contract none of spouses can acquire any immovable property or other property, which requires the state registration.[9]

United Kingdom
England and Wales

Prenuptial agreements historically had not been considered legally enforceable in England and Wales due to a reluctance on the part of the judiciary for public policy reasons. The 2010 Supreme Court test case of Radmacher v Granatino,[10] overturned the previous legal framework on them to recognise changing societal and judicial views on the personal autonomy of married partners. Pre-nuptial agreements will now be enforced by the courts as part of their discretion in financial settlement cases under section 25 of the Matrimonial Causes Act 1973 so long as the three stage Radmacher test is met and it is considered fair to do so, keeping in mind the interests of any child of the family. Radmacher states that the courts will give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless, in the circumstances prevailing, it would not be fair to hold the parties to their agreement. The case provided substantial amounts of guidance relevant to all nuptial agreement cases that have occurred since 2010.[11]

The Law Commission's 2014 report on Matrimonial Property generally accepted the decision in Radmacher and recommended the creation of a 'qualifying nuptial agreement' regime by Parliament which would create a completely binding pre-nuptial agreement so long as certain requirements were met. The Commission's recommendations have yet to be implemented.

North America

Canada

Prenuptial agreements in Canada are governed by provincial legislation. Each province and territory in Canada recognizes prenuptial agreements. For instance, in Ontario prenuptial agreements are called marriage contracts and they are recognized by section 52 of the Family Law Act.[12]

United States

Currently, prenuptial agreements are recognized, although they may not always be enforced. Both parties should have lawyers represent them to ensure that the agreement is enforceable and can work with agreement between both parties. In some cases, the parties retain a private judge to be present during the signing, to be sure that neither party has been coerced into the agreement. Some attorneys recommend videotaping the signing, although this is optional. Some states such as California require that the parties be represented by counsel if spousal support (alimony) is limited by the agreement.[13] Consequently, prenuptial agreements may become void if there is evidence that they are signed under duress.[14]

Prenuptial agreements are, at best, a partial solution to obviating some of the risks of marital property disputes in times of divorce. They protect minimal assets and are not the final word. Nevertheless, they can be very powerful and limit parties' property rights and alimony. It may be impossible to set aside a properly drafted and executed prenup. A prenup can dictate not only what happens if the parties divorce, but also what happens when they die. They can act as a contract to make a will and/or eliminate all your rights to property, probate homestead, probate allowance, right to take as a predetermined heir, and the right to act as an executor and administrator of your spouse's estate.

A prenuptial agreement is only valid if it is completed prior to marriage. After a couple is married, they may draw up a post-nuptial agreement. There are several ways that a prenuptial agreement can be attacked in court. These include lack of voluntariness, unconscionability, and a failure to disclose assets.[15]

In the United States, prenuptial agreements are recognized in all fifty states and the District of Columbia. Likewise, in most jurisdictions, five elements are required for a valid prenuptial agreement:[16]

  1. agreement must be in writing (oral prenups are generally unenforceable);
  2. must be executed voluntarily;
  3. full and/or fair disclosure at the time of execution;
  4. the agreement cannot be unconscionable;
  5. it must be executed by both parties (not their attorneys) "in the manner required for a deed to be recorded", known as an acknowledgment, before a notary public.

Prenuptial agreements in all U.S. states are not allowed to regulate issues relating to the children of the marriage, in particular, custody and access issues.[17] The reason behind this is that matters involving children must be decided in the children's best interests.[18] However, this is controversial: some people believe that as custody battles are often the worst part of a divorce, couples should be able to settle this in advance.[19]

Courts will not enforce requirements that one person will do the dishes or that the children will be raised in a certain religion.[18] In recent years, some couples have included social media provisions in their prenuptial agreements, setting forth rules as to what is permissible to be posted on social media networks during the marriage, as well as in the event the marriage is dissolved.[20]

A sunset provision may be inserted into a prenuptial agreement, specifying that after a certain amount of time, the agreement will expire. In Maine, for prenuptial agreements executed before October 1, 1993, unless the parties renew the agreement, it automatically lapses after the birth of a child.[21] In other states, a certain number of years of marriage will cause a prenuptial agreement to lapse. In states that have adopted the UPAA (Uniform Premarital Agreement Act), no sunset provision is provided by statute, but one could be privately contracted for. Note that states have different versions of the UPAA.

Unlike all other contract law, consideration is not required, although a minority of courts point to the marriage itself as the consideration. Through a prenup, a spouse can completely waive rights to property, alimony or inheritance as well as the elective share and get nothing in return. Choice of law provisions are critical in prenups. Parties to the agreement can elect to have the law of the state they are married in govern both the interpretation of the agreement and how property is divided at the time of divorce. In the absence of a choice of law clause it is the law of the place the parties divorce, not the law of the state they were married that decides property and support issues.

In drafting an agreement, it is important to recognize that there are two types of state laws that govern divorce – equitable distribution, practiced by 41 states, and community property, practiced in some variation by 9 states. An agreement written in a community property state may not be designed to govern what occurs in an equitable distribution state and vice versa. It may be necessary to retain attorneys in both states to cover the possible eventuality that the parties may live in a state other than the state they were married. Often people have more than one home in different states or they move a lot because of their work so it is important to take that into account in the drafting process.

With respect to financial issues ancillary to divorce, prenuptial agreements are routinely upheld and enforced by courts in virtually all states. There are circumstances in which courts have refused to enforce certain portions/provisions of such agreements. For example, in an April, 2007 decision by the Appellate Division in New Jersey, the court refused to enforce a provision of a prenuptial agreement relating to the wife's waiver of her interest in the husband's savings plan. The New Jersey court held that when the parties executed their prenuptial agreement, it was not foreseeable that the husband would later increase his contributions toward the savings plan.

California

In California, one case (Hall v. Hall, 222 Cal. App. 3d 578 (1990))[22] enforced an oral prenuptial agreement in the probate of the estate of one of the parties because the surviving spouse had substantially changed her position in reliance on the oral agreement. Marriage of Benson (2005) 36Cal.4th 1096 distinguishes Hall. Parties can waive disclosure beyond that which is provided, and there is no requirement of notarization, but it is good practice. There are special requirements if parties sign the agreement without attorney, and the parties must have independent counsel if they limit spousal support (also known as alimony or spousal maintenance in other states). Parties must wait seven days after the premarital agreement is first presented for review before they sign it, but there is no requirement that this be done a certain number of days prior to the marriage. Prenups often take months to negotiate so they should not be left until the last minute (as people often do). If the prenup calls for the payment of a lump sum at the time of divorce, it may be deemed to promote divorce. This concept has come under attack and a lawyer should be consulted to make sure the prenup does not violate this provision.

In California, through a prenuptial agreement a couple may waive their rights to share property (community property).[23] The agreement can limit spousal support (although a court at the divorce can set this aside if it deems that the limitation is unconscionable). The agreement can act as a contract to make a will requiring one spouse to provide for the other at death. It can also limit probate rights at death, such as the right to a probate allowance, the right to act an executor, the right to take as a predetermined heir, and so forth.[13] In California, Registered Domestic Partners may also enter into a prenup. Postmarital agreements are treated very differently in California law. Spouses have a fiduciary duty to one another so premarital agreements come under a special category of agreements. There is a presumption that the postmarital agreement was obtained by undue influence if one party gains an advantage. Disclosure cannot be waived in the context of a postmarital agreement.

Oceania

Australia

Prenuptial agreements are recognised in Australia by the Family Law Act 1975 (Commonwealth).[24]

Premarital mediation

Premarital mediation is an alternative way of creating a prenuptial agreement. In this process, a mediator facilitates an open discussion between the couple about all kinds of marital issues, like expectations about working after children are born and saving and spending styles as well as the traditional premarital discussions about property division and spousal support if the marriage is terminated. The engaged couple makes all of the decisions about what would happen in the event of a separation or divorce with the assistance of the mediator. They then draft either a deal memo or a premarital agreement and have it reviewed by their respective attorneys. An agreement developed via mediation is typically less expensive because fewer hours are spent with attorneys because the couple has made all of the decisions together, rather than one side vs. the other.

Catholicism

Prenuptial agreements are a matter of civil law, so Catholic canon law does not rule them out in principle (for example, to determine how property would be divided among the children of a prior marriage upon the death of one spouse).

In practice, prenuptials may run afoul of Church law in a number of ways. For example, they cannot subject a marriage to a condition concerning the future (such as an agreement about the dividing of assets in case of divorce). The Code of Canon Law provides: "A marriage subject to a condition about the future cannot be contracted validly". (CIC 1102)

The Canon Law: Letter and Spirit, a commentary on canon law, explains that condition may be defined as "a stipulation by which an agreement is made contingent upon the verification or fulfillment of some circumstance or event that is not yet certain". It goes on to state that "any condition concerning the future attached to matrimonial consent renders marriage invalid". For example, a marriage would be invalid if the parties stipulated that they must have children or they have the right to divorce and remarry someone else.

Judaism

In Judaism, the ketubah, a prenuptial contract, has long been established as an integral part of the Jewish marriage, and is signed and read aloud at the marriage ceremony. It contains the husband's requirement to support his wife by providing her with food, clothing and sex, as well as providing for the wife's support in the case of divorce or the husband's death. However, under this passage, a woman is free to leave if her husband doesn't provide for her.

In 2004, the High Court of South Africa upheld a cherem against a Johannesburg businessman because he refused to pay his former wife alimony as ordered by The Johannesburg Beth Din.[25]

Recently, a movement supporting an additional prenuptial agreement has emerged in some Modern Orthodox circles. This is in response to a growing number of cases in which the husband refuses to grant gett, a religious divorce. In such matters, the local authorities are unable to intervene, both out of concerns regarding separation of church and state and certain halakhic problems that would arise. This situation leaves the wife in a state of aginut, in which she is unable to remarry. To remedy this situation, the movement promotes a prenuptial agreement in which the couple agrees to conduct their divorce, should it occur, in a rabbinical court.

Islam

In Islam, there is also marriage contract, known traditionally as Aqd qeran, aqd nekah or aqd zawaj, is found in most Arab and Islamic countries. However, in Egypt, Syria, Palestine, Jordan and Lebanon (only those 5 countries) it is known to many people as Katb el-Kitab. Most countries, however, do not call it Katb el-Kitab. It has long been established as an integral part of the Islamic marriage, and is signed at the marriage ceremony. Similar to Judaism, it outlines the rights and responsibilities of the groom and bride or other parties involved in the marriage proceedings.But this is different than Prenuptial agreement as the spouses can inherit each other by only signing the marriage contract without needing any thing else.

References

Notes
  1. ↑ Robert DiGiacomo (2 April 2008). "Quit fighting -- get a postnuptial agreement". CNN LifeWire. Cable News Network. Retrieved 18 June 2012.
  2. ↑ "Legally bound: Pre-nuptial agreements have no legal sanctity in India yet a few rich and affluent insist on signing them". Business Standard. 21 July 2012. Retrieved 5 November 2013.
  3. ↑ "Indian Contract Act". Article 10, Act No. 9 of 1872.
  4. ↑ "Indian Contract Act". Article 23, Act No. 9 of 1872.
  5. ↑ "I do — and I want". The Telegraph (India). 25 November 2015. Retrieved 8 December 2015.
  6. ↑ "Why marriages are made in Goa". DNA India. 3 March 2008. Retrieved 8 December 2015.
  7. ↑ "Marriage Contract Prenuptial in Thailand | Article (older) Archive". www.thailandlawonline.com. Retrieved 2017-07-05.
  8. ↑ "Civil and Commercial Code: Marriage (Section 1465-1493) | Thailand Law Library". library.siam-legal.com. Retrieved 2018-09-18.
  9. ↑ LLC., UKRCONSULTING LAW FIRM. "Marriage (prenuptial) contract in Ukraine". ukrconsulting.biz (in Russian). Retrieved 2017-07-05.
  10. ↑ Bowcott, Owen (20 October 2010). "Prenup agreement enforced under UK law". The Guardian. London.
  11. ↑ "Supreme Court rules in favour of pre-nuptial agreement". BBC News. 20 October 2010.
  12. ↑ "Prenuptial Agreements by Province". Retrieved 1 July 2016.
  13. 1 2 See subsection (c) of "California Family Code, Sec. 612". California Legislative Information. California State Legislature. Retrieved 27 August 2017.
  14. ↑ See, e.g., "Kremer vs. Kremer (2018)" (PDF). Minnesota Courts. State of Minnesota. Retrieved 1 June 2018.
  15. ↑ See generally, Krause, Elrod, Garrison & Oldham, "Family Law: Cases, Comments, and Questions", Thomson West, St. Paul MN (2003) ISBN 0-314-26377-2
  16. ↑ Debele, Gary A.; Rhode, Susan C. "717363v1 1 Prenuptial Agreements in the United States" (PDF). International Academy of Family Lawyers. Retrieved 27 August 2017.
  17. ↑ Larson, Aaron. "Mistakes to Avoid in Prenuptial Agreements". ExpertLaw. Retrieved 27 August 2017.
  18. 1 2 Fields, Jonathan E. (2008). "Forbidden Provisions in Prenuptial Agreements: Legal and Practical Considerations for the Matrimonial Lawyer" (PDF). Journal of the American Academy of Matrimonial Lawyers. 21: 413–438. Retrieved 27 August 2017.
  19. ↑ James Andrew Miller (16 July 2007). "Preparing for a Broken Home". The New York Times. The New York Times Company. Retrieved 27 August 2017.
  20. ↑ Effron, Laura (3 June 2014). "I Love You, You're Perfect, but Watch What You Facebook: Social Media Prenups". ABC News. Retrieved 27 August 2017.
  21. ↑ "Maine Uniform Premarital Agreement Act, Sec. 606. Effect of children". Maine Revised Statutes. Maine Legislature. Retrieved 27 August 2017.
  22. ↑ "Hall v. Hall, 271 Cal. Rptr. 773, 222 Cal.App.3d 578 (1990)". Google Scholar. Google. Retrieved 27 August 2017.
  23. ↑ Tour-Sarkissian, Christine (7 July 2016). "When Does Separate Property Become Community Property (or Vice Versa)?". Real Property Law Reporter, Continuing Education of the Bar. Retrieved 27 August 2017.
  24. ↑ "FAMILY LAW ACT 1975 - SECT 90C". Commonwealth Consolidated Acts. Australasian Legal Information Institute. Retrieved 18 June 2012.
  25. ↑ http://www.bregmans.co.za/court-upholds-jewish-orthodox-right-of-excommunication/
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