Choice of law in a marital agreement for binational couples

Why a binational couple faces three legal questions

International family law has no single law that governs a marriage as a whole. The property regime, the divorce itself and maintenance each follow a different set of rules, and each can point to a different country. The Versorgungsausgleich (pension rights adjustment) is a fourth question and depends on the law of the divorce.

That makes combinations normal that sound absurd at first. A German court grants a divorce under Spanish law. It divides the assets under French property law. And maintenance follows the law where the person entitled to it lives. A choice of law in a marital agreement clears up this scatter, as far as the individual regulations allow.

Which property law applies without a choice of law

Without an agreement, a tiered set of connecting factors applies Art. 26 EuGüVO. First comes the law of the country where the spouses had their first common habitual residence after the wedding. If there was none, their common nationality at the time of the marriage counts, and failing that, the closest connection.

So the first home you share sets a course that many couples choose without realizing it. If you spend your first two years of marriage in Madrid and then move to Frankfurt, Spanish law still governs your property regime. A later move does not change that in principle. Only by exception may a court, on one spouse’s application, apply the law of a later country where the couple lived considerably longer. Even then, both sides must have based their financial planning on that law Art. 26 (3) EuGüVO.

The cut-off date matters. The regulation’s conflict rules apply to marriages entered into on or after January 29, 2019 Art. 69 (3) EuGüVO. Older marriages follow the earlier German conflict rules, which often lead to a different result. That is why an answer found online is often simply wrong for a marriage from 2005, as Foreign assets in the equalization of accrued gains shows in detail.

Choosing the law for the property regime

Spouses and engaged couples can decide for themselves which law governs their property regime Art. 22 EuGüVO. Two legal systems are available. One is the law of the country where either of you has your habitual residence at the time of the choice. The other is the law of a country of which either of you is a national at that time.

Older marriages can make this choice too. If you choose the law after January 29, 2019, your property regime comes under the regulation’s rules, whatever year you married. For long-standing binational marriages, this is often the only way out of an unclear connection.

The choice must be in writing, dated and signed by both spouses Art. 23 (1) EuGüVO. If both live in the same Member State, that state’s additional formal requirements apply as well. In Germany, that means notarization with both of you present at the same time § 1410 BGB. If you live in different Member States, the form of either state is enough.

Choosing the law for the divorce

The law that applies to the divorce has its own list of options Art. 5 Rome III. You can choose from four legal systems:

• the law of your common habitual residence,
• the law of a former common habitual residence,
• the law of either spouse’s nationality,
• the law of the court hearing the case.

In Germany, this agreement must be notarized Art. 46e (1) EGBGB. You can also still make it during proceedings, up to the close of the oral hearing at first instance Art. 46e (2) EGBGB.

What applies without such a choice is explained in Which law applies to our divorce?. The practical difference is considerable. Waiting periods, presumptions that the marriage has broken down and whether fault matters vary widely from one legal system to the next.

Why the pension rights adjustment depends on the divorce

The Versorgungsausgleich (pension rights adjustment) follows the law that applies to the divorce under Rome III Art. 17 (4) EGBGB. It is carried out only under two conditions. German law must apply under Rome III. And the law of at least one country whose nationality the spouses hold when the case is filed must recognize such an adjustment at all.

This leads to a side effect that surprises many people. If you choose Spanish or Italian divorce law, you will as a rule switch off the adjustment as well, even though the agreement does not say a word about it. For the spouse with smaller pension rights, this is often the largest financial item in the entire agreement.

A fallback rule softens this. On one spouse’s application, the adjustment is carried out under German law. This requires that one of you acquired pension rights in Germany during the marriage and that carrying it out is fair. No one should count on this, because the fairness review is open-ended and its outcome hard to predict.

Maintenance goes its own way

Maintenance obligations are governed neither by Rome III nor by the property regulation, but by the 2007 Hague Maintenance Protocol (HUP). Without an agreement, the law of the habitual residence of the person entitled to maintenance applies. That law changes with every move.

A choice of law is possible Art. 8 (1) HUP. You can choose the law of either party’s nationality or habitual residence, and also the law that governs your property regime or your divorce. That last option is the most useful in practice, because it lets you bring all three questions under the same legal system. It comes with four limits.

• The agreement must be in writing and signed by both parties Art. 8 (2) HUP.
• It is not available for maintenance owed to minors or to vulnerable adults Art. 8 (3) HUP.
• Whether maintenance can be waived at all is decided by the law of the entitled person’s habitual residence, regardless of the choice Art. 8 (4) HUP.
• If the parties were not fully informed of the consequences of their choice, the chosen law is set aside where applying it would lead to manifestly unfair or unreasonable results Art. 8 (5) HUP.

The third limit affects marital agreements directly. A waiver of maintenance can fail because of it, even though the choice of law itself is valid.

What a choice of law cannot do

You cannot agree on which court has jurisdiction over the divorce itself. Jurisdiction follows the fixed rules of the Brussels IIb Regulation, and whoever first files an admissible petition in effect decides where the case is heard. For maintenance, a jurisdiction agreement is possible within limits, but not for claims of minor children.

Which countries come into question is covered in Which country should we file in?.

The second limit lies outside the EU. A non-EU country is not bound by a European choice of law and applies its own conflict rules. If you own assets in such a country, for example real estate in Turkey or the United States, we have the validity checked locally. We do this before the notarization, never afterward. This double check takes time, and it is the only way to a notarized agreement that also holds up where the assets are.

What we look at for a choice of law in the first consultation

Almost every case with an international element turns on the same four facts. Where did you first live together after the wedding? Which nationalities do you hold today? Where are your assets? And in which year did you marry? These four points show which law would apply without an agreement and whether a choice of law improves anything at all.

Sometimes the answer is that it does not. If you have both lived in Germany for years, work here and plan to stay, almost every connecting factor leads to German law anyway. A choice of law changes little. We tell you so, rather than selling you a clause that makes no difference.

The bigger picture is on our page about international family law, and the framework of the agreement itself on our page about the marital agreement.