Choice of law in a prenuptial agreement for binational couples

Why a binational couple faces three questions

International family law knows no single status for a marriage. Three separate sets of rules govern the property regime, the divorce itself and maintenance, and each can point to a different country. The pension rights adjustment hangs off the divorce as a fourth question.

Combinations that sound absurd at first are therefore entirely normal. A German court divorces under Spanish law. Assets get divided under French property law. And maintenance follows the law where the creditor lives. A choice of law in a prenuptial agreement clears up that scatter, as far as the individual regulations allow it.

Which property law applies without a choice

Without an agreement a graduated connecting factor applies Art. 26 EuGüVO. What governs first is the law of the state where the spouses had their first common habitual residence after the marriage. Where none exists, their common nationality at the wedding counts, failing that the closest connection.

That first common residence is a setting of the points which many couples make unawares. Spend the first two years of marriage in Madrid and then move to Frankfurt and you stay in Spanish property law. A later move changes nothing in principle. Only exceptionally may a court, on the application of one spouse, apply the law of a later state lived in for a considerably longer period, and even then only where both sides had based their financial planning on it Art. 26 Abs. 3 EuGüVO.

The cut-off date matters. Conflict rules of the regulation apply to marriages concluded from 29 January 2019 Art. 69 Abs. 3 EuGüVO. Older marriages follow the earlier German conflict rules, which often reach a different result. An answer found online is therefore frequently plain wrong for a marriage from 2005, as Foreign assets in the equalization of accrued gains sets out in detail.

Choosing the law for the property regime

Spouses and engaged couples may determine the law applicable to their property regime themselves Art. 22 EuGüVO. Two legal systems are available. One is the law of the habitual residence of either of them at the time of the choice. The other is the law of a state whose nationality either of them then holds.

Older marriages have this option too. Make a choice of law after 29 January 2019 and the property regime comes under the rules of the regulation, whatever the year of the wedding. For long-standing binational marriages that is often the only way out of an unclear connecting factor.

Form requires writing, a date and the signatures of both spouses Art. 23 Abs. 1 EuGüVO. Where both live in the same Member State, that state’s additional form requirements come on top. In Germany that means notarization with both simultaneously present § 1410 BGB. Where they live in different Member States, the form of either state suffices.

Choosing the law for the divorce

A separate catalogue governs the law applicable to the divorce Art. 5 Rom III. Four legal systems can be chosen:

• the law of the common habitual residence,
• the law of a former common habitual residence,
• the law of a spouse’s nationality,
• the law of the court seised.

In Germany this agreement has to be notarized Art. 46e Abs. 1 EGBGB. It can also still be made during proceedings, up to the close of the oral hearing at first instance Art. 46e Abs. 2 EGBGB.

What applies without such a choice is described in Which law applies to the divorce?. Its practical significance is considerable. Waiting periods, presumptions of breakdown and the question whether fault plays any role differ sharply from one legal system to the next.

Why the pension rights adjustment hangs off the divorce

The Versorgungsausgleich (pension rights adjustment) follows the law applicable to the divorce under Rome III Art. 17 Abs. 4 EGBGB. It gets carried out on two conditions only. German law has to apply under Rome III. And the law of one of the states the spouses belong to when proceedings become pending has to recognize such an institution at all.

A side effect follows that surprises many. Choose Spanish or Italian divorce law and you switch off the pension rights adjustment as a rule, without a word about it appearing in the agreement. For the spouse with the smaller pension entitlements that is often the largest economic item in the whole deed.

A fallback softens the effect. On the application of one spouse the pension rights adjustment is carried out under German law. Its precondition is that one side acquired domestic pension rights during the marriage and that carrying it out is equitable. Nobody should rely on this, because an equity test is open-ended and its outcome hard to predict.

Maintenance goes its own way

Neither Rome III nor the property regulation governs maintenance obligations. That falls to the Hague Maintenance Protocol of 2007, in short the HMP. Without an agreement the law at the creditor’s habitual residence applies. This law changes with every move.

A choice of law is possible Art. 8 Abs. 1 HUP. Available are the nationality law or the residence law of either party, and alongside them the law governing their property regime or their divorce. That last point is the most useful in practice, because it lets all three questions be pulled onto one legal system. Four limits belong with it:

• The agreement requires writing and the signatures of both parties Art. 8 Abs. 2 HUP.
• For maintenance owed to minors and to vulnerable adults it is not available Art. 8 Abs. 3 HUP.
• Whether maintenance can be waived at all is decided, irrespective of the choice, by the law at the creditor’s habitual residence Art. 8 Abs. 4 HUP.
• Where the parties were not fully informed of the consequences of their choice, the chosen law is set aside once its application would lead to manifestly unfair or unreasonable results Art. 8 Abs. 5 HUP.

That third limit hits prenuptial agreements directly. A waiver of maintenance can fail on it although the choice of law itself is valid.

What a choice of law cannot achieve

Jurisdiction for the divorce itself cannot be agreed. It follows the fixed connecting factors of the Brussels IIb Regulation, and whoever files an admissible petition first effectively determines where proceedings take place. For maintenance a jurisdiction agreement is possible within limits, and for claims of minor children again it is not.

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

A second limit lies outside the EU. A third state is not bound by a European choice of law and applies its own conflict rules. Where assets sit in such a state, say a property in Turkey or in the United States, we have validity checked locally. That happens before notarization and never afterwards. This double check costs time and is the only route to a deed that also carries where the assets are.

What we pin a choice of law on in a first meeting

Almost every case with a foreign element turns on the same four pieces of information. Where did you first live together after the wedding, which nationalities do you hold today, where are the assets, and in which year did you marry. Those 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. Where both sides have lived in Germany for years, work here and intend to stay, almost every connecting factor leads to German law anyway. A choice of law changes little then. We say so rather than selling a clause that moves nothing.

The wider context is described on our page about international family law, the framework of the agreement itself on the page about the prenuptial agreement.

Legal notice: This article is provided for general information and does not replace legal advice in an individual case. Any laws, deadlines and amounts mentioned reflect the state of affairs at the time of publication and may change. A binding assessment requires a personal consultation.