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NEW IMPETUS FOR PRENUPTIAL AGREEMENTS : An ounce of prevention is worth a pound of cure.

Prenuptial agreements are getting more and more popular among partners interested in getting married. Primarily reserved to movie stars until recently, prenuptial agreements are beginning to be generalized. Here is an overview of the legal framework both in Spain and in Anglo-Saxon countries :

The so called « prenup » is a tool often used to foresee possible twists of fate in the life of a marriage. It offers legal certainty and serenity to husbands and spouses willing to plan what future might look like.

 

What is a prenup?

In Spain and in Baleares, prenuptial agreements are indeed legal and authorized, but not clearly defined in law. Due to this lack of codification, partners are given free reins to determine the duties they will have to fulfil.

There is a broad set of questions that needs to be resolved when divorce comes up : what will be the amount of alimonies ? who will get a compensation ? who will get which possessions ? and even sometimes tough questions like the inheritance of children from a first marriage.

The prenuptial agreement answers all these questions.

It tries to resolve problems before they appear and to guarantee a smooth marriage.

 

Legal framework

Not everything is permitted in a prenuptial agreement. In fact, Judges often find some clauses to be unfair and therefore annul them. Excessive clauses that can be found in some celebrities’ prenups would not stand a chance in Spain. For example, the interdiction to gain more than 20 pounds (that is said to exist in some prenups !) would be considered void.

Here are the rules that guide the Judge when considering if a clause is exorbitant or not : first,  the clause must not contradict public order, law, or morality. More specifically, the Judge will also pay attention to the effects of the clauses on the parties and third parties. If an obligation creates serious damage to a partner or if it harms the interest of children, it will be ruled out.

Concretely, in Spain, it would not be possible to determine in advance which partner will have custody of children. This question can only be resolved after the divorce by the Judge, considering primarily the interest of the child.

Despite these limitations, it is still possible to institute an agreement that is more favourable towards one of the partners, in disadvantage of the other. For example, one of the partners can renounce totally to his right to alimonies in case of divorce, and this is considered to be legal.

 

CASE OF FAMILY COMPANIES

The assets of both managers and companies can sometimes be intermingled and it can affect the way a company is managed, especially when a manager passes away or when a divorce occurs.

This is the reason why the mechanism of « protoclos familiares » already exists and is designed to foresee the management of the company in respect of the situations of managers.

The pacts of the Protocol can be recorded on the Trade register so that they become binding and can be enforced. But it is also recommended to conclude a prenuptial agreement in addition to the Protocol. In this case, the prenup goes over again the pacts of the Protocol that concern the personal life of managers in order to makes them binding for parties to the prenup. Without this new safety guard, the provisions that directly affect the lives of managers could stay ineffective.

Thanks to this double protection, it is possible to contemplate the implementation of very precise measures such as the obligations for managers to marry according to a certain type of marriage regime.

 

In Anglo Saxon countries.

Anglo Saxon countries have very different practices and laws regarding prenuptial agreement. In the United Kingdom, Courts went as far as to prohibit entirely prenups until 2010. This quite extreme interdiction contrasts sharply with the habits in the USA.

In the USA, writing a prenuptial agreement is not considered as something unusual as in Spain, but rather a common thing to do before the wedding. Parties are very free in respect to what they decide to put in the agreement, and it can lead to some extravagant clauses. But if partners have more freedom and latitude regarding what they commit to, rules differ when it comes to children.

As in Spain, a clause that would be harmful to children would be ruled out. For example, if the pacts determine in advance who will get custody of the child if divorce happens, a Judge could decide to dismiss the clause if it created a prejudice for the child.

In the United Kingdom, prenuptial agreements are considered to be valid, or at least can be valid, only since caselaw “Radmacher vs. Granatino” of 2010. Since then, partners can conclude a prenup, but Judges are still competent to decide on the validity of the agreement and to revise the pacts where required. Despite this quite narrow path for parties to the contract, future partners have in contrast total freedom on the economic regime that they will choose for their marriage, because the types of regimes are not even classified and set by law. This of course is very different from the three types of regimes that are laid down in the Spanish civil code.

Generally speaking, it is still more common in Anglo Saxon countries to resort to a prenuptial agreement than in Spain. Even when considering the different leeway that are given to partners in the writing of the prenup, in all countries, the limit is drawn when one of the parties or the children are exorbitantly harmed by the conditions laid down.

In Conclusion, there is a growing tendency for partners to turn to a prenuptial agreement before marriage, because more and more couples want to foresee in the best way possible the twists of fate. Especially when 6 out of 10 weddings end in divorce in Spain.

Even if Spanish jurisdictions recently extended the freedom that partners have when writing the clauses, it remains important to draft a thorough and strict contract, in perfect compliance with current legislation. This is to ensure partners the best chances of success for the future.

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