Posts
Breaking up is hard to do —
financially
Andrea
Murad, 7 January 2014
Prenuptial
agreements around the world...
Planning a
wedding is stressful enough, so for many couples, considering how they would
handle the financial fallout of a split is hardly on their minds ahead of the
big day.
But that
might be changing. With a growing number of international marriages has also
come an increase in the prevalence of prenuptial agreements, say some lawyers
who specialise in matrimonial law.
A
prenuptial agreement or ‘pre-nup’ is a legally binding contract which can
outline how finances and possessions would be split and handled if a couple
divorce. In some countries, these agreements have existed for hundreds of years
while in others, they’re relatively new. In addition to protecting each
partner’s assets, these agreements can be designed to protect family money,
companies or real estate.
“One reason for a pre-nup is to create clarity and
protection of wealth and assets — clarity, that is to have a clear arrangement
on how the family partnership will operate,” said Jeremy Morley, an
international divorce lawyer based in New York.
Morley said pre-nup discussions can open the door to how
couples expect to run their financial affairs during their marriage. “All over
the world, people don’t talk about money, but it’s very hard to predict the
future and how relationships will change,” he added.
Without a
pre-nup, the courts will decide how marital assets are divided after a split
according to a country’s laws. “Pre-nups are insurance policies against high lawyer
fees,” said Randy Kessler, partner at Kessler & Solomiany, a law firm in
Atlanta. In Kessler’s opinion it is unlikely that the other side will spend a
lot of money if a pre-nup exists.
But before
entering into a pre-nup, spouses need to consider which assets they want to
protect or the financial support they would need to maintain their current
lifestyle if they were to separate from their partner. Agreements can also
include sunset provisions that will make the pre-nup invalid after a certain
period of time. And married couples can even enter into a post-nuptial
agreement after they are married that acts in a similar way to a pre-nup.
BBC
Capital spoke to family law lawyers in the United Arab Emirates, France,
Germany, Japan and the US for more information about how these agreements work
around the world. Scroll through the images above to see the ins-and-outs of
pre-ups in those countries.
United
Arab Emirates: Sharia law and contractual obligations...
Only UAE
nationals, or Emiratis, marry under UAE law. The country follows Sharia law,
and this is outlined in the Quran.
In 2012,
according to the UAE National Bureau of Statistics, 8,753 or 59% of the 14,934
marriages were between nationals, while 2,351 or 60% of the 3,901 divorces were
between Emirati couples. For every 3.7 Emirati marriages that year, there was
one divorce.
“Islam provides an entire regime in and of itself,” said
Jeremy Morley, an international divorce lawyer based in New York. “Marriage is
a contract, and you are required to have a contract that will regulate within
the consequences of divorce.”
The
marriage contract under Sharia law is already a type of a pre-nuptial
agreement. It starts with the Mahar (dowry), which has two parts: an
accelerated dowry is paid upfront at the time of the marriage to cover any
wedding expenses and a late dowry is paid at divorce or following the husband’s
death.
To
encourage Emiratis to marry other Emiratis, the late Sheikh Zayed bin Sultan Al
Nahyan, the former UAE president, set a limit on dowries to prevent Emirati
grooms from slipping into debt. Currently, the accelerated Mahar cannot exceed
AED 20,000 ($5,445) and the late Mahar has an AED 30,000 ($8,168) limit — a
total of AED 50,000 ($13,613). Since currency tends to lose value, many brides
ask for this money in gold.
“[The
contract] sets up exactly what the woman will be paid upfront and at the end of
the marriage,” said lawyer and legal consultant Diana Hamade, founder of
International Advocate legal Services based in Dubai. “If the man can prove
that the woman contributed to the end of the marriage, she won’t get paid the
dowry.”
The
husband would have to prove that his wife caused him harm by neglecting him, by
spending too much money or by going out too much, for example. A UAE woman is
able to leave a marriage voluntarily and obtain a Khula. But without being able
to prove harm, she would have to give up everything, including wealth and
children, and repay her husband for everything he had bought for her during the
marriage, Hamade said.
Child
custody and support is not addressed in the marital contract — but these are
very detailed in the law and are not left to the judge’s discretion. Often,
when there are children involved, a woman will usually maintain custody and
manage the children’s day-to-day activities, and from her ex-husband, she will
receive an apartment and child support payments.
Non-Muslim
expats who marry in the UAE will often draft pre-nups that follow the laws of
their homeland.
Germany:
Where pre-nups are more the norm...
United
States: Courts, mediation and complications...
Japan:
Where courts take a back seat...
Most
Japanese couples don’t divorce through the courts. The procedure, called kyōgi
rikon, is very administrative. Couples who agree to divorce instead file
registration documents with a local municipal office. Pre-nups are very rare in
Japan because couples rely on the country’s detailed civil code to determine
how to divide their assets.
Marriage
in Japan is on the decline while the number of divorces has held steady for the
past decade. In 2011, there were about 662,000 marriages and about 236,000
divorces, according to the Japanese Ministry of Health, Labour and Welfare — or
one divorce for every 2.8 marriages that year.
“All the
statutes offer many provisions for divorce,” said Tokyo-based lawyer Hirohito
Kaneko. “The statute of the family court is very clear [regarding] the division
of marital assets.”
In a
divorce, all assets that were acquired during the marriage, excluding any
assets earned prior to the marriage, or any inheritances or gifts, are divided
between each spouse. Japanese law doesn’t provide for spousal support.
“He pays her a modest lump sum just to get divorced,” said
New York lawyer Morley. “That’s usually the end of it — he’s divorced from his
wife and children. There’s very little visitation by the non-custodial parent
in Japan, but this is slowly changing.”
Pre-nups
are more popular in marriages between a Japanese citizen and an international
person. These marriages tend to be more complicated. The couple’s assets could
be spread throughout several different countries, and the couple may decide to
stay in Japan or move to another country in the future.
“Japan has freedom of contract, and [couples] can split
assets however they want — they can make their own deal,” said Morley. “The
civil code in Japan provides that assets created during the marriage are to be
divided equally after the marriage.”
Although
the agreement addresses the division of assets and spousal support, it does not
address issues regarding children, like custody matters and child support.
Child support is determined by the civil code, but is rarely paid and it is
difficult to enforce payment.
To date, there hasn’t been a case that tested pre-nups in
Japan. “It’s very unusual for court cases in Japan to be tested,” said Morley.
“The pre-nup agreement would give more certainty."
