Prenuptial agreement

A prenuptial agreement, antenuptial agreement, or premarital agreement, commonly abbreviated to prenup or prenupt, is a contract entered into prior to marriage, civil union or any other 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 maintaining 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]

Legal recognition

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

Australia

Prenuptial agreements are recognised in Australia by the Family Law Act 1975 (Commonwealth).^[2]

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.^[3]

Continental 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).

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 prenups. 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.^[4]

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.^[5] However, the Section 23 of the same act states that a contract may be void if they are immoral or against public policy.^[6]

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.^[7][8]

England and Wales

Prenuptial agreements have historically not been considered legally valid in England and Wales. This is still generally the case, although a 2010 Supreme court test case between the German heiress Katrin Radmacher and Nicolas Granatino,^[9] indicated that such agreements can "in the right case" have decisive weight in a divorce settlement.^[10] The Law Commission is due to consider whether a change should be made to the letter of the law, recognizing prenupts in a more general way; they will report on the matter in 2012.

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. 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.^[11]

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.

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:

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. The reason behind this is that matters involving children must be decided in the children's best interests. 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.^[12]

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.

In California, one case (Hall v. Hall, 222 Cal. App. 3d 578 (1990))^[13] 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, an agreement is very powerful.^[14] A couple can waive their rights to share property (community property). It 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.^[15]

In California, Registered Domestic Partners may also enter into a prenup.

Courts will not enforce requirements that one person will do the dishes or that the children will be raised in a certain religion.^[16]

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.

Of note, 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.

A sunset provision may be inserted into a prenuptial agreement, specifying that after a certain amount of time, the agreement will expire. In a few states, such as Maine, the agreement will automatically lapse after the birth of a child, unless the parties renew the agreement. 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.

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, of which there are 41 states and 9 states that are some variation of community property. 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.

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.^[17]

A newer type of prenuptial (or post-nuptial) agreement is the so-called social media prenuptial agreement. This agreement outlines 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.

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.

Thailand

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 that:

1. It has to be a written agreement signed by both parties.
2. Two witnesses are required.
3. The agreement should be attached with the marriage certificate where the marriage is registered.

These conditions are found at clause 1466 of the Commercial and Civil Code of Thailand.

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.^[18]

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, the prenuptial contract, Katb el-Kitab, 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 marriage proceedings.

References

Notes

1. Robert DiGiacomo (2 April 2008). "Quit fighting -- get a postnuptial agreement". CNN LifeWire. Cable News Network. Retrieved 18 June 2012.
2. "FAMILY LAW ACT 1975 - SECT 90C". Commonwealth Consolidated Acts. Australasian Legal Information Institute. Retrieved 18 June 2012.
3. "Prenuptial Agreements by Province". Retrieved 1 July 2016.
4. "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.
5. Article 10, Indian Contract Act, Act No. 9 of 1872
6. Article 23, Indian Contract Act, Act No. 9 of 1872
7. "I do — and I want". The Telegraph (India). 25 November 2015. Retrieved 8 December 2015.
8. "Why marriages are made in Goa". DNA India. 3 March 2008. Retrieved 8 December 2015.
9. Bowcott, Owen (20 October 2010). "Prenup agreement enforced under UK law". The Guardian. London.
10. "Supreme Court rules in favour of pre-nuptial agreement". BBC News. 20 October 2010.
11. California Family Code 1612(c).
12. JAMES ANDREW MILLER (16 July 2007). "Preparing for a Broken Home". The New York Times. The New York Times Company. Retrieved 18 June 2012.
13. "Hall v. Hall (1990)". Justia, US Law, California Case Law. Justia. 26 July 1990. Retrieved 18 June 2012.
14. "ENFORCEABILITY OF PRENUPTIAL AGREEMENTS". Law Offices of Warren R. Shiell. Warren R. Shiell. Retrieved 18 June 2012.
15. California Family Code 1612
16. http://www.aaml.org/sites/default/files/MAT210_1.pdf
17. see generally, Krause, Elrod, Garrison & Oldham, "Family Law: Cases, Comments, and Questions", Thomson West, St. Paul MN (2003) ISBN 0-314-26377-2
18. http://www.bregmans.co.za/court-upholds-jewish-orthodox-right-of-excommunication/

External links

• Media related to Marriage contracts at Wikimedia Commons