When is a prenuptial agreement worthwhile?

Quick overview

A prenuptial agreement is particularly useful when you want to regulate your property relations differently than the law prescribes. It can establish separate property, narrow or extend the community of property, or postpone the creation of community property until the dissolution of the marriage. However, the agreement can only relate to property and debts, not child custody or maintenance. It must be signed by a notary and it is wise to have it entered in a public register to make it more effective against third parties, typically creditors or executors.

What is the purpose of a prenuptial agreement?

The Civil Code does not explicitly use the term “prenuptial agreement”, but speaks of a contract on the matrimonial property regime. In common parlance, however, the term prenuptial agreement is correctly used for a situation where the spouses settle their future property relations before the wedding. The same agreementcan be concluded during the marriage, but it is not “prenuptial” in the literal sense, but still an agreed property regime.

Its main advantage is predictability. Instead of the statutory matrimonial property regime automatically applying after marriage, the partners can set their own rules. This is useful, for example, in business, in real estate investments, in protecting the family from debts or when one partner wants to contribute assets to future life together that would otherwise not be part of the community property at all.

In practice, we often see that it is not so much a matter of mistrust, but of trying to avoid unnecessary disputes. The most common mistake is that the spouses think that “it will work out” and only start dealing with property issues when the first major problem arises – typically a business debt, foreclosure or housing dispute. This is when there is much less room for prevention.

What you can change in your contract

According to the Civil Code, fiancés or spouses can agree on a different property regime from the statutory one. The law explicitly lists four basic options: a separate property regime, a regime reserving the creation of community property until the date of dissolution of the marriage, a narrowing of the scope of the community property and an extension of the community property. The agreement may concern both existing assets and future assets. It may also provide for the administration of the community property, i.e. who will decide on the property and how.

The most common is the separate property regime. This makes sense if the partners want to keep their assets and debts separate even after marriage. This does not mean that they cannot own anything together. They can, for example, buy a flat or a car in joint ownership, it just won’t be community property anymore.

The other option is to reduce the community property. This is useful, for example, if one partner runs a business and the other does not want the business risks to fall on the family assets. On the other hand, extending the community of property is used less often by couples, but it also makes sense in practice – for example, if one of the spouses bought a house before the wedding and both want to share in its financing and future ownership.

An interesting but less used option is to reserve the creation of community property for the date of dissolution of the marriage. In practice, this means that during the marriage, each person works for himself or herself in terms of property, but only on the dissolution of the marriage will it be determined what will be held in common. This is a legally possible option, but it is not common in everyday practice.

What does not belong in a prenuptial agreement

A prenuptial agreement can only concern property. It cannot regulate the care of the children after the divorce, contact with the children, child maintenance or other personal obligations between the partners. The Civil Code allows very wide contractual freedom, but only within the framework of the property regime. It also expressly provides that a contract may not exclude or modify the rules on the usual furnishings of the family household, subject to certain legal exceptions.

Similarly, the contract must not prejudice the rights of third parties. If, for example, it were to be used purely for the purpose of opposing creditors, it would not be effective against them without further effect. Moreover, the law expressly states that a contract concluded without the consent of a third party will not affect his rights. This is very important in practice, especially in the case of debts and foreclosures.

It should also be remembered that the law does not recognise retroactive effects of a contract. In other words, you cannot enter into a contract today and claim that it has been in force for several months retrospectively in order to “cover” older debts or to change an earlier property status. If the spouses negotiate retroactivity, the law does not take it into account.

How to enter into a contract and why to list it

The agreement on the matrimonial property regime must take the form of a public deed, i.e. a notarial deed. It cannot be validly concluded without a notary. If it is signed by the spouses, it will only take effect when the marriage is celebrated. If it is already concluded by the spouses, it takes effect from the moment specified in the contract, but without retroactive effect.

It is also very practical to enter the contract in the public register kept for matrimonial property regimes. The law expressly provides for this, and it is this registration that helps considerably in relation to third parties. In practice, this is mainly the case when one of the spouses applies for a loan, runs a business or faces execution. If the contract is duly registered, third parties can verify the change in the legal regime.

In our practice, it has been repeatedly shown that the mere drawing up of a contract is not sufficient unless the spouses also address its “practical life”. In more risky situations, typically with a business or known older debts, it is usually wise to think also about documentary evidence, the origin of money and entries in public registers. This is where the most common disputes arise later.

When is a prenuptial agreement worth the most

A prenup usually makes the most sense when one of the partners is running a business, investing or entering the marriage with more assets or, conversely, debts. For entrepreneurs, protecting the other spouse and living together is especially important. This is because if the normal legal regime is maintained, debts and business risks can have a significantly greater impact on the family.

A typical example is the situation where one fiancé owns a house before the wedding and the other wants to invest significantly in it after the marriage. Without a clear agreement, unpleasant disputes can arise later over who owns what and who is entitled to a settlement. Similarly, an agreement is often useful when the partners want to keep separate investments, rentals or savings, but at the same time want to share certain specific items.

We know from our legal practice the opposite cases, where the agreement did not serve to “separate everything”, but instead to expand the community property. One of the fiancés purchased a house before the wedding, the other was to finance extensive renovations, and both wanted to be legally certain that the property would indeed be joint. This too is a legitimate and, in many relationships, very sensible solution.

On the other hand, not every couple finds a contract worthwhile. If both are operating on simple assets, are not running a business, are not entering the marriage with debts or major assets and are comfortable with the legal regime, a contract may be unnecessarily complex. It’s fair to say that too. The point is not to draw it up at any cost, but to use it where it makes practical sense.

Summary

A prenuptial agreement is not a symbol of mistrust, but a tool for making property arrangements understandable. It is particularly useful for business, larger assets, debts, housing investments or where partners want to maintain greater property independence. It is concluded by notarial deed and can establish separate property, narrow or extend the community of property or postpone its creation until the dissolution of the marriage. However, it cannot deal with children or other personal issues. A well-drafted agreement can prevent disputes and, in some situations, really protects the whole family.